EMI Sale Timeline Legal

Talks continue, but Terra Firma v Citigroup court battle still likely

By | Published on Monday 11 October 2010

According to the Mail, negotiations continue between EMI owners Terra Firma and US bank Citigroup ahead of their pending court battle, due to kick off in New York on 18 Oct.

As much previously reported, Terra Firma and its tax-avoiding boss man Gary ‘The Guy’ Hands claim the tedious bankers at Citigroup provided them with duff advice ahead of their 2007 acquisition of EMI, causing them to bid too high a price for the flagging music monolith. Gary says Citigroup, and his former best buddy there, David ‘The Worm’ Wormsley, advised him badly because the bank had a conflict of interest, them working for both Terra Firma and EMI at the time.

Terra Firma and Citigroup did remain on good terms for some time after Gary’s EMI buy, but they fell out big time last year, seemingly when the bank refused to take a hit on its multi-billion dollar loan to EMI in order to help the equity group restructure the music firm’s finances. The lawsuit followed and, despite Citigroup’s efforts to have the whole thing quickly dismissed, a New York judge last month confirmed he’d hear the case from 18 Oct

Gary and The Worm’s lacklustre attempts to reach an out of court settlement officially finished early last month, though the Mail says “sporadic” talks between the two parties have continued, as recently as this weekend.

Partly because PR advisors for both sides reckon neither the equity men nor the bankers will come out particularly well from a high profile analysis of how business was done at the peak of the made-up-money boom of the last decade. For starters, you’ll get idiot journalists referring to the two main protagonists as Gary and The Worm.

That said, while both Terra Firma and Citigroup recognise an out of court settlement would probably be sensible, neither side is sufficiently in love with ‘the sensible option’ to compromise, so a full court hearing is still looking likely. Which is good news for those of us sitting on the sidelines. I really must remember to buy that new ‘hilarious litigation hat’ later this week.