Terra Firma launches fresh legal bid over EMI

Guy Hands' firm has begun another round of legal proceedings over former portfolio company EMI, petitioning the UK courts to grant it access to documents held by PricewaterhouseCoopers.

Terra Firma, which last year lost a legal battle with Citi in which it alleged the investment bank had duped it into overpaying for music publisher EMI, has made another legal application to the UK's High Court.

Private Equity International understands the firm has made an application to the High Court for a hearing that is likely to take place in November or December. Parties representing Terra Firma and PwC are understood to have met in court on Tuesday for a pre-action disclosure hearing.

At the hearing later this year, a source close to the firm said Terra Firma's lawyers would formally request access to documents concerning Citi's decision to place EMI into a pre-pack administration, which was handled at the time by PricewaterhouseCoopers.

Terra Firma lost its entire £1.6 billion investment in the company in February this year when Citi took control of it through a debt-for-equity swap, with PwC acting as administrators in the restructuring.

In March, the firm's head, Guy Hands, gave his first in-depth interview following the EMI debacle to Private Equity International.

Both Terra Firma and the buyout firm's investors have struggled to understand why Citi placed the company into administration, a source close to the firm said. All the interest payments on EMI's debt were met, the source indicated, and additional equity was invested in the business to ensure no covenants were breached.

Terra Firma, which is understood to have hired law firm Clyde & Co. to handle the new legal action, declined to comment.

Citi, which is not involved in the new legal proceedings, also declined to comment. It is currently seeking buyers for the music publisher.

PwC could not be reached for comment at press time.