Now the Persian Gulf sovereign wealth fund appears ready to challenge that decision, setting up another battle between Quinn Emanuel and Citi’s lawyers at Paul, Weiss, Rifkind, Wharton & Garrison over ADIA’s disastrous $7.5 billion investment in the bank in 2007. The New York Supreme Court’s records Web site has posted caption information for a new ADIA suit against Citigroup, with no docket entries aside from what appears to be an undecided motion to seal the record. But the filing suggests Quinn Emanuel is seeking to contest the Oct. 14 award.
The docket shows that Paul Weiss is again appearing on behalf of Citi. Both Citi counsel Brad Karp of Paul Weiss and a bank spokeswoman declined to comment. ADIA counsel Peter Calamari of Quinn Emanuel declined to comment, and a spokesperson for the fund did not respond to an e-mail seeking comment.
ADIA filed the arbitration in 2009, accusing Citi of fraudulent misrepresentations related to $7.5 billion in capital it injected into the bank in November 2007, as the subprime mortgage crisis was beginning to heat up. As part of the deal, ADIA would get equity units for the equivalent of $31.83 to $37.24 a share that it could later convert into common shares. But by the time Citi disclosed that ADIA had brought its arbitration claim, the bank’s shares were trading at $3.56.
The sovereign wealth fund sought recession of the $7.5 billion investment or recovery of its $4 billion in losses, plus interest, according to Citigroup. We named Paul Weiss’s Karp Litigator of the Week after Citi disclosed the arbitration award in November.