Terra Firma unleashes ‘superlawyer’ vs. Citi

The attorney representing Terra Firma Capital Partners in its suit against Citi is a notable so-called “superlawyer” who has worked on some of the most high-profile cases in recent court history. 

Terra Firma’s attorney, David Boies, founder and chairman of Boies Schiller & Flexner, served as lead counsel for former US vice president Al Gore, who disputed the election results in Florida in the 2000 presidential election. Former President George W. Bush eventually was declared the winner after the US Supreme Court officially ended all vote recounts in Florida.

Boies also served as special trial counsel for the US Department of Justice in its successful anti-trust suit against Microsoft. The case against the technology giant, which resolved in the favour of the US government, prompted Microsoft chief executive officer Bill Gates to complain that Boies was “out to destroy Microsoft”, according to media reports.

Boies also has represented controversial radio talk show host Don Imus and the owner of US baseball team

David Boies

the New York Yankees, George Steinbrenner.

Florida attorney Dexter Douglass, who worked with Boies on Al Gore’s team during the recount, told PEO in an interview “if [Boies] is on the other side, you better tell your other lawyers to quit the bar and get to work”.

One of Boies’ talents is the ability to “retain what he’s done in the way of research”, Douglass said, adding that is a skill “other people don’t have. He is very thorough and he has a tremendous knowledge of the law and trial”.

Terra Firma recently filed a lawsuit against Citi, alleging the investment bank not only tricked it into paying £4 billion for music publisher EMI in 2007, but has since tried to push the company into insolvency. Terra Firma alleges Citi fraudulently compelled the firm into paying too much for the company by telling the firm that another private equity firm, Cerberus Capital Management, was still in the auction when in fact all other bidders had withdrawn, the complaint said.

The private equity firm is seeking billions of dollars in damages, a source told PEO. Citi has denied any wrongdoing and says it will defend the lawsuit “vigorously”.

EMI has proven to be a disastrous investment for Guy Hands’ firm. The music publisher, home to the likes of Coldplay, Snoop Dogg and REM, accounts for 30 percent of Terra Firma’s two latest funds.

Terra Firma initially used £1.5 billion of equity in the deal, and added another £210 million of equity upon request by Citi, according to the court filing. Citi provided £2.5 billion in debt for the deal, but was subsequently unable to syndicate the loans and has had to carry it on its balance sheet.

One Terra Firma LP expressed some skepticism about the lawsuit in an interview with PEO, saying Terra Firma should have been firm on a price it deemed appropriate for the asset, rather than be influenced by an auction process.

“Saying your bank advisors didn’t tell you someone had dropped out, or that they dropped out at a lower price than you were looking at paying, seems a strange line to take,” the LP said. “You would expect them to make their own line up about the right price to pay.

“It almost sounds like, ‘they’re bidding this much, if you want to get it you have to up your offer,’” the LP said. “You would think they’d say, ‘this price is sensible to pay’, or not, and walk away if you think the price is too high.”

There is some comfort in the fact that Guy Hands “has a lot of his own money tied up in this”, the LP said. “He’s very motivated to get a positive outcome.”