A British court has rejected a call by Terra Firma Capital Partners Ltd. chairman Guy Hands for an explanation of why music company EMI Group Ltd. was taken out of his hands by Citigroup Inc. and insolvency administrators PricewaterhouseCoopers LLP, crystallizing a loss by Terra Firma of about £1.85 billion ($2.8 billion).
The judgment, delivered after the New Year's holiday but not reported until Wednesday, Jan. 11, is a blow to Hands' hopes for some kind of redress or clarification in London while he waits for further progress on a separate case in New York.
Hands is not expecting the decision to affect his appeal against a 2010 U.S. court ruling clearing Citi of all allegations relating to its advice to him on his £4.2 billion purchase of EMI in 2007. It was not yet clear on Wednesday whether he intends to pursue further in London the question of EMI's subsequent expropriation by Citi and PwC.
The English High Court had been asked to rule on whether Citi or PwC should be forced to give Terra Firma their reasons for putting the business into administration.
But High Court Judge Nicholas Warren ruled they should not. And, as the Financial Times reported on Wednesday, he rejected Terra Firma's request that PwC, Hawkpoint Partners Ltd. and American Appraisal Associates Inc. hand over valuation reports and written communications relating to valuations when Citi took control of EMI in February.
Terra Firma's legal representatives, barristers David Wolfson and Andreas Gledhill, reportedly argued that the appointment of the administrators was not valid and that the sale of EMI was undervalued or should not have taken place at all.
According to the FT, Warren found that Terra Firma did not need "any of the valuations" to formulate their claims in so far as they center on the value of EMI Group.
He also said there was "not the slightest suggestion" that Citi, which has agreed to sell EMI's publishing operations to a Sony Corp. consortium and the recorded music division to Vivendi SA's Universal Music Group, had "effected sales at undervalue."
Wolfson and Gledhill were instructed on behalf of Terra Firma by London law firm Clyde & Co. LLP.
Terra Firma and PwC declined to comment.