Terra Firma Loses To Citi, Could Mean End Of EMI
(UPDATED) A NYC has jury ruled today that a Citigroup banker did not lie to Guys Hands and Terra Firma about a rival bid. The loss could force Terra Firma to relinquish control of EMI to Citi who both brokered the purchase and is the main lender providing $4.23 billion in financingThe jurors deliberated for just four hours over two days before reaching their verdict after a contentious three week trial. Citi has already written off $1.63 billion of the debt saying that EMI is only worth just under $3 billion now.
Throughout the trial, CitiGroup lawyers contend that Hands had simply made a bad deal that he (and they) now had to live with. "Guy Hands couldn’t fight technology,” said a Citi attorney early this week. “No one’s buying records anymore.”
If Terra Firma is unable to meet its debt obligations and relinquishes control of EMI, most observers believe that the company would be split up and sold. Several parties including WMG (for the record division) and BMG (publishing) have publicly expressed interest in the past.