New York Judge To Decide If Citigroup’s (C) Case Will Be In London

A New York judge will take a decision on whether to move a case against Citigroup, Inc. (NYSE: C), which has been filed by Terra Firma Capital Partners, to London.

Terra Firma Capital Partners, a private equity firm, has accused Citigroup of tricking it into buying London-based EMI Group Ltd. The firm has accused that the banking giant, which advised it on the deal, misled it into believing that another private equity player, Cerberus Capital Management LP, was bidding for the EMI. Terra confirmed that it would not have placed a bid for the record company if it was not advised of another private equity firm bidding for it.

Terra Firma sued Citigroup to recover the billions it lost in equity. Terra Firma bought EMI Group in 2007. Citigroup was set to earn substantial fees on the deal, and was also going to act as a lender to EMI. Lawyers at Citigroup said that documents in the deal indicate any disputes should be handled by U.K. courts. Many of Terra Firma’s limited partners are said to be looking to enforce jurisdiction clause.

Terra bought EMI for 4 billion pounds or $6.2 billion, at the height of the leveraged buy-out boom in 2007. The company had to write-off half of its EMI investment after the record-company posted 1.5 billion pounds loss last year.

Guy Hands, Terra Firma’s CEO and founder, stepped down after these write-downs. Sungate Securities LLP, another limited partnership accused Citigroup of not disclosing its conflict of interests, in another case filed in the Florida circuit court.