Hard-hit online lender CAN Capital makes executive changes

The biggest online lender to small businesses in the US has pulled down the shutters and put its top managers on a leave of absence, in the latest blow to an industry grappling with mounting fears over credit quality. Atlanta-based CAN Capital said on Tuesday that it had replaced a trio of senior executives, after […]

Continue Reading


BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

Continue Reading


Zoopla wins back customers from online property rival

Zoopla chief executive Alex Chesterman has branded rival OnTheMarket “a failed experiment”, and said that his property site was winning back customers at a record rate. OnTheMarket was set up last year, aiming to compete with Zoopla and Rightmove, the UK’s two biggest property portals. It allowed estate agents to list their properties more cheaply […]

Continue Reading


Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

Continue Reading

Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

Continue Reading

Categorized | Financial

US judges overturn Citi’s win over EMI

Posted on May 31, 2013

Citigroup’s 2010 victory over Guy Hands in a bitter courtroom feud over his ill-fated £4.2bn buyout of EMI has been overturned on appeal. It sets the stage for a retrial pitting a prominent London dealmaker against one of private equity’s most outspoken investors.

A US federal appeals court found that Judge Jed Rakoff had incorrectly instructed the jury in the three-week fraud trial which ultimately ruled against Mr Hands’ contention that the US bank had misled Terra Firma, his private equity firm.

    The jury instructions had been based on an inaccurate understanding of English law, three circuit judges ruled, incorrectly shifting the burden of proof from Citigroup to Terra Firma. “Whether that error actually affected the jury’s determination is unknowable,” they wrote.

    The circuit judges dismissed as “unpersuasive” other arguments that Terra Firma had made for reversing the original verdict, but the ruling is an unexpected victory for Mr Hands and his legal team, led by David Boies.

    Mr Hands said through a spokesman: “We continue to believe that we have a strong claim, and with the jury instructions now resolved in our favour we expect to prevail in any subsequent trial.”

    Citigroup said: “We are confident we will again prevail at trial as Citi’s conduct in the EMI transaction was entirely proper. The original verdict made clear that Terra Firma’s baseless accusations of fraud were simply an attempt to gain leverage in debt restructuring negotiations.”

    Unless the two sides settle, a retrial could pit Mr Hands once more against his former friend, David Wormsley, the Citigroup banker who advised him on the EMI transaction. During the 2010 trial, Mr Hands noted that suing your banker is “something you would only do as a very, very last resort”.

    The appeals court noted that the original case had been a “he-said-she-said” dispute over whether Mr Wormsley had made misleading statements causing Terra Firma to overpay for EMI. In a retrial, a jury would start from the presumption that Mr Hands had relied on his banker’s advice.

    While the jury took only five hours to find in favour of Citigroup in 2010, Mr Hands pursued the appeal in the hope of recouping some of Terra Firma’s EMI losses for investors and restoring his reputation. The disastrous, high-profile EMI deal was struck in 2007 just as souring credit markets made it impossible for him to syndicate the debt.

    He told the court he had put two-thirds of his own wealth – or at least $100m – into the deal. Terra Firma pushed for $8bn in damages, but Judge Rakoff said before the verdict it could not have won more than $2bn.

    After Citigroup seized EMI from Terra Firma in February 2011, the partially taxpayer-owned bank ended up running the home to The Beatles, the Sex Pistols and Katy Perry until it was broken up and sold last year.

    Universal Music bought most of EMI’s record labels and a Sony-led consortium now owns most of EMI Music Publishing. Mr Hands is highly unlikely to be able to get the company back, but could push for financial compensation to recover some of the £1.7bn of equity Terra Firma put into EMI.