Terra Firma Capital Partners has abandoned its US legal claim against Citigroup and will instead combine it with its ongoing UK lawsuit – as part of which it intends to file new evidence against the bank.
The firm, which is seeking damages from Citigroup, claims it was tricked into paying too much for music publisher EMI.
An appeal court last year ruled the Guy Hands-led firm ought to get a second chance to prove this, after losing the original case in 2010.
Terra Firma originally sued Citigroup in the US, where the investment bank division is based, and filed a UK claim late last year where most of the bank's lending division is based.
However, the firms have now decided to resolve their disputes in a single set of proceedings, Terra Firma said in a statement. “As a result, the parties have consented to the transfer of the claim before the New York Court to England, to be consolidated with the proceedings that are ongoing before the English Court,” the firm said.
Terra Firma declined to comment on why it had taken this step.
It is understood that Terra Firma has found new evidence, which it did not submit in the US case. In the event the firm had lost its US case, it would have been able to sue Citigroup again in the UK based on this new evidence, a source close to the matter told Private Equity International.
However because the US case, which was due to be heard in September last year, had been pushed back to July this year as a result of scheduling issues, there was a risk that the evidence would expire under the statute of limitations system in the UK.
In order to present the newly obtained evidence, Terra Firma therefore filed a case in the UK late last year. That case – which will now include the original claims it launched in the US – is likely to be heard in 2015 or 2016.
The news comes after it recently emerged that Terra Firma is planning to raise €2 billion for its fourth buyout fund. The vehicle will come to market in May. The firm is also currently raising a renewable energy fund, which is targeting $2 billion with a hard-cap of $3 billion.