Coldplay is a successful EMI act
Terra Firma, the owner of EMI, is suing Citigroup, saying the bank "misrepresented fundamental facts" over the 2007 purchase of the record firm.
The private equity company is accusing the bank, which brokered the sale, of falsely claiming that other bidders were in the frame.
Terra Firma says it raised its bid and eventually paid £4bn ($6.5bn) for EMI.
Citigroup said the lawsuit was "without merit" and it would defend itself "vigorously".
Terra Firma claims that the firm Citigroup falsely said was in the running to purchase EMI was Cerebus Capital Management.
According to Terra Firma's lawyer, Jonathan Sherman, Cerebus had actually withdrawn from the EMI auction hours before it closed.
Citigroup served as adviser, lender and broker to EMI, whose artists include Coldplay and Robbie Williams, and sole financier to Terra Firma.
Terra Firma has invested a total of $20bn of equity capital in businesses around the world.