A lawsuit by Terra Firma Capital Partners against Citigroup over Terra Firma's deal to acquire EMI Group in 2007 will go to trial, a US judge has ruled.

Terra Firma claims the head of Citigroup's UK investment-banking business misrepresented to Guy Hands, Terra Firma's chairman, that Cerberus Capital Management had made a higher, competing bid for EMI in the final days before an auction for the recording company in May 2007. Citigroup was serving as EMI's financial adviser at the time and also acted as Terra Firma's lender on the deal.