Business News Labels & Publishers Legal

Hands and Citigroup may have met to discuss EMI court case

By | Published on Tuesday 7 September 2010

So, according to reports, Terra Firma boss Guy Hands put on his finest woolly jumper yesterday, you know, the one his Aunt Aida knitted while on that coach trip to Bridlington, for a closed doors meeting with the men from Citigroup, to discuss the two parties’ upcoming court squabble in New York.

The aim of the meeting was to see if there was any last minute deal that could be done that could result in an out of court settlement. Rumours that said meeting had been planned started circulating last month, though this Sunday The Mail were quoting insider sources that said neither side was really in negotiating mood, and said meeting was therefore expected to be very short.

Assuming no agreement can be reached this week, the big court case should kick off next month on 18 Oct. As previously reported, Hands is suing the bankers over the information and advice they provided just before his company’s big takeover of EMI in 2007. The financier argues that Citigroup had a conflict of interest, because another part of the company was working for the then-and-still flagging music firm. He contends that had the bank provided more accurate information he wouldn’t have gone through with his ambitious and ultimately disastrous takeover of the London-based music major.

EMI still has a multi-billion pound debt to Citigroup stemming from Terra Firma’s acquisition, of course. The equity group began legal action against their bank last year after efforts by Hands to restructure that debt failed. As also previously reported, EMI needed a further cash injection from Terra Firma earlier this year to meet covenants relating to that loan, and it seems likely that further cash injections will be required in future years too. Though Terra Firma are very keen to tell us that the vast majority of their investors are still very supportive of their music company, so that’s no problem at all then.

Neither Citigroup nor Terra Firma have commented on their out of court negotiations, not even to confirm or deny they are happening. It therefore seems likely we’ll hear no more about this case, idle speculation aside, until 18 Oct.

For legal reasons we must stress that, if this meeting did indeed happen, which it may or may not have done, Guy Hands would not have worn a woolly jumper knitted by his Aunt Aida. In fact that jumper, that aunt and all of that knitting were figurative. Coach trips to Bridlington do occur, however. 



READ MORE ABOUT: | | |