In 2007, investment firm Terra Firma purchased control of music giant EMI Ltd. $2.5 billion in the hole, Terra Firma has not done well with the investment. Terra Firma, headed by Guy Hands, sued Citibank over the investment. A jury decided in support of Citibank. Terra Firma accused Citibank of defrauding them within the obtain of Emi.
EMI bought by Terra Firma
The British business EMI was bought by Terra Firma in August 2007 for $6.8 billion. In October 2007, the obtain was funded by Citigroup right before the credit market stopped. Since that purchase, Guy Hands, who controls the Terra Firma fund, has lost billions within the business. He has additionally been the target of frustrated investors who aren’t happy with the fact two-thirds of the fund is tied up within the quickly shrinking Electronic and Musical Industries.
Citigroup and Terra Firma in the courtroom
Citigroup, which funded the Terra Firma purchase of EMI, has been on the defensive. Terra Firma states that it had been defrauded in the Electronic and Musical Industries purchase by Citigroup which led to the suit. It was not a "bidding war" to get EMI. This is what Terra Firma had been led to believe. Everybody in the jury agreed that Citigroup was no guilty. Terra Firma was not defrauded.
The upcoming place EMI will go
EMI is a music label in Britain. It’s one of the largest in fact. The Rolling Stones had been once on the EMI label. Others like Lilly Allen either have been or are on the label right now. In 2007, Guy Hands and Terra firma became in charge of the label. This meant that hardly cash was spent. This led to large acts leaving the label. The Rolling Stones was one of these. EMI cost Hands more than $8 billion he claims besides cost cuts. Hands might really well be removed as the head of Terra Firma, also as Emi. Refinancing for EMI is "much less likely" to take place with Citigroup after the suit. One more company might end up purchasing the musical industry giant due to this.
Citations
Business Week
businessweek.com/news/2010-11-04/citigroup-wins-trial-against-terra-firma-over-emi-sale.html
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