Terra Firma sues Citigroup over EMI
p2pnet news view | Music:- EMI owner Terra Firma is suing Citigroup, accusing it of misrepresenting “fundamental facts”.
EMI is one of the Gang of Four labels which, to to all intents and purposes, control the corporate music industry.
The other three are Vivendi Universal (France), Sony (Japan) and Warner Music (US).
“The private equity company is accusing the bank, which brokered the sale, of falsely claiming that other bidders were in the frame,” says the BBC, going on:
“Terra Firma says it raised its bid and eventually paid £4bn ($6.5bn) for EMI.
“Citigroup said the lawsuit was ‘without merit’ and it would defend itself ‘vigorously’.”
The lawsuit “follows a difficult two years for Terra Firma and its multi-millionaire boss Guy Hands (right) following the purchase of EMI on the eve of the credit crunch,” says the Guardian.
“The recession and internet piracy has seen the music publisher’s value plummet while it remains saddled with £2.6bn of debt,” it says, continuing:
“The group is trying to find investors to inject further funds into the business. City pension funds, insurers and foreign banks have been approached amid fears that it will default on interest payments to Citigroup, which bankrolled the buyout.
“A decision to sue in the New York courts is unlikely to have been taken lightly by Hands, who has a long relationship with the investment bank. However, relations have deteriorated since Hands failed to persuade Citigroup to write off £1bn of the EMI loan in exchange for Terra Firma pumping in another £1bn of equity.”
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BBC – EMI owner Terra Firma sues Citigroup over EMI purchase, December 13, 2009
Guardian – Firma takes Citigroup to court over EMI deal, December 13, 2009
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