Abu Dhabi fund seeks Citigroup deal scrapped or pay up $4 billion in damages

December 15, 2009 by · Leave a Comment
Filed under: Legal News 

I think many were wondering when this was going to be addressed.  If you remembered back when this deal was made was when we still had investment banks and people thought this crisis was just a mild recession and all these banks were buys and were temporarily impaired because of these pesky real estate decline.  Abu Dhabi paid a handsome sum at the time to come help Citigroup out when they were in a pinch and since that investment or speculation depending on how you look at this, were burned pretty bad with Citi’s shares trading at $3.78 per share.

My thinking is that Citi will rework the terms of the deal to make sure that credit-line is their for them in the future if they need it in the future.  It will be interesting to see how this turns out and I have been thinking about this for over a year now, glad to see its in the media and getting some traction.

Citigroup Inc said on Tuesday the Abu Dhabi Investment Authority filed an arbitration claim against it, accusing the U.S. lender of misrepresentation over a $7.5 billion investment by the sovereign wealth fund.  The sovereign wealth fund, considered by some the largest in the world, bought securities from the U.S. bank in 2007. In the original deal, the Citigroup bonds must be converted into common stock at a price between $31.83 and $37.24 a share between March 2010 and September 2011.

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