Citigroup exec forgetful on witness stand in NYC

AP News
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Posted: Oct 26, 2010 8:25 PM
Citigroup exec forgetful on witness stand in NYC

A Citigroup banker accused of tricking a British private equity firm into paying too much for music company EMI had a forgetful day on the witness stand Tuesday as he tried to recall his role in the acquisition.

"I'm afraid I don't recall," Citigroup executive David Wormsley said at one point in what became his mantra on his first full day of testimony in the trial over Terra Firma Capital Partners' claims that Wormsley and Citigroup tricked it into bidding too much for EMI on the false belief that there were other bidders.

Wormsley even said he could not recall for sure that he told Terra Firma founder Guy Hands not to play games on price just before the May 2007 auction even though Terra Firma lawyer David Boies displayed an e-mail in which Wormsley told an EMI executive he had done so.

"I would love to be able to remember it, but I don't," Wormsley said before a jury in U.S. District Court in Manhattan. He said that after seeing the e-mail, he had "no doubt" he told Hands not to play games on his bid price.

"But you have no independent recollection," Boies said.

"That's correct," Wormsley responded.

And so it went through most of the day as Wormsley's inability to remember the content of his phone conversations or meetings or whether he made phone calls or had meetings. That shut down lines of questioning, leaving Boies to repeatedly try to revive Wormsley's memory.

Wormsley's memory did come to life when he recalled his anger at Hands for suggesting that a lower bid than the one Terra Firma eventually made might be sufficient to win approval from EMI's board.

"I was furious on this," he testified. He said he demanded that Hands send written confirmation to EMI saying he had never made that representation.

Wormsley said an e-mail sent by a top Terra Firma executive that conceded Wormsley had never said a lower offer would be sufficient provided vindication, along with a telephone message from Hands in which "Hands apologized for lying."

Boies asked for proof of the phone message. Wormsley said he had intended to keep it, but it had gotten erased.

Wormsley also testified that the first time he knew for sure that Terra Firma was the only bidder for EMI was after the lawsuit was filed.

Wormsley recalled that EMI told him not to negotiate with bidders. He said he obeyed the command.

Terra Firma paid $4.9 billion for EMI, which Hands estimates to be worth 25 percent less now. The firm sued Citigroup Inc. last year, seeking a return of any money Citigroup was paid for the deal among other unspecified damages, including lawyer fees.

Closing arguments in the civil trial are expected next week.