Business News EMI Sale Timeline Labels & Publishers Legal

Date set for Terra Firma and Citigroup’s EMI deal retrial

By | Published on Monday 6 October 2014

Terra Firma v Citigroup

Ah, remember when Terra Firma owned EMI? They were happy, heady days. I miss em. The job culls. The amusing statements from big cheese Guy Hands. The random short-lived hires from Planet Tech and FMCG Central. The unhappy artists bad mouthing management to the press. The billion dollar debts and the constant rumours of doom, gloom and repossession, and then the actual day of doom, gloom and repossession. And above all, I miss the threat of libel action.

Anyway, as regular viewers will remember, there is one final chapter of Terra Firma’s EMI adventure that was never fully closed. Its legal battle with the wanker bankers at Citigroup over the advice they gave Hands that led to him buying the record company in the first place, resulting in a blood-letting of Terra Firma cash.

Hands claimed that Citi man David Wormsley lied about another bidder for EMI, which made Terra Firma rush to a decision to acquire the music company. Citigroup was also working for EMI at the time, and stood to gain from the massive loans it provided to help fund the deal. Those massive and highly public loans – which couldn’t be restructured down the line as originally planned once the credit crunch had, well, crunched – made it nigh on impossible for the revamped EMI under Terra Firma’s control to become a viable concern.

The legal dispute went before a court in New York in 2010. Both sides came out of the trial looking like fools, but Wormsley and the bankers prevailed. Except an appeals court then ordered a retrial, on the basis that some specifics of English law – which governed the acquisition – had not been properly explaining in the New York courtroom.

After some back door waffling, it was agreed by both Terra Firma and Citigroup to move the dispute to the London courts, who should know a thing or two about English case law, and now, according to Bloomberg, a date has been set for that hearing. So, get this in your diaries, June, erm, 2016. It seems that it was Citigroup who asked for the court hearing to be set sometime off in the future. Perhaps they’ve heard something about the world ending in March that year.

Confirming the trial date, Judge Julian Flaux said: “Serious allegations of fraud are made against the defendant and against three individual bankers”.

Meanwhile Citigroup said in a statement: “As demonstrated by the original verdict in New York, Citi and its bankers treated Terra Firma honestly and did nothing wrong in connection with the EMI transaction. We will continue to vigorously defend ourselves and those bankers against these baseless accusations”.

And press reps for Terra Firma added: “Can’t wait, we’ll bring the biscuits”. No, actually, they declined to comment. Spoilsports. So people, see you here in the legal spot in June 2016, and we’ll get that final chapter written.