US judges overturn Citi's win over EMI Citigroup's 2010 victory over Guy Hands in a bitter courtroom feud over his ill-fated £4.2bn buyout of EMI has been overturned on appeal. It sets the stage for a retrial pitting a prominent London dealmaker against one of private equity's most outspoken investors. A US federal appeals court found that Judge Jed Rakoff had incorrectly instructed the jury in the three-week fraud trial which ultimately ruled against Mr Hands" contention that the US bank had misled Terra Firma, his private equity firm. IN Media The jury instructions had been based on an inaccurate understanding of English law, three circuit judges ruled, incorrectly shifting the burden of proof from Citigroup to Terra Firma. "Whether that error actually affected the jury's determination is unknowable," they wrote. The circuit judges dismissed as "unpersuasive" other arguments that Terra Firma had made for reversing the original verdict, but the ruling is an unexpected victory for Mr Hands and his legal team, led by David Boies. Mr Hands said through a spokesman: "We continue to believe that we have a strong claim, and with the jury instructions now resolved in our favour we expect to prevail in any subsequent trial." Citigroup said: "We are confident we will again prevail at trial as Citi's conduct in the EMI transaction was entirely proper. The original verdict made clear that Terra Firma's baseless accusations of fraud were simply an attempt to gain leverage in debt restructuring negotiations. Unless the two sides settle, a retrial could pit Mr Hands once more against his former friend, David Wormsley, the Citigroup banker who advised him on the EMI transaction. During the 2010 trial, Mr Hands noted that suing your banker is "something you would only do as a very, very last resort." The appeals court noted that the original case had been a "he-said-she-said" dispute over whether Mr Wormsley had made misleading statements causing Terra Firma to overpay for EMI. In a retrial, a jury would start from the presumption that Mr Hands had relied on his banker's advice. While the jury took only five hours to find in favour of Citigroup in 2010, Mr Hands pursued the appeal in the hope of recouping some of Terra Firma's EMI losses for investors and restoring his reputation. The disastrous, high-profile EMI deal was struck in 2007 just as souring credit markets made it impossible for him to syndicate the debt. He told the court he had put two-thirds of his own wealth - or at least $100m - into the deal. Terra Firma pushed for $8bn in damages, but Judge Rakoff said before the verdict it could not have won more than $2bn. After Citigroup seized EMI from Terra Firma in February 2011, the partially taxpayer-owned bank ended up running the home to The Beatles, the Sex Pistols and Katy Perry until it was broken up and sold last year. Universal Music bought most of EMI's record labels and a Sony-led consortium now owns most of EMI Music Publishing. Mr Hands is highly unlikely to be able to get the company back, but could push for financial compensation to recover some of the £1.7bn of equity Terra Firma put into EMI.