In 2007, investment firm Terra Firma bought control of music giant Electric and Musical Industries Ltd. Terra Firma sued Citibank after losing $2.5 billion in this expenditure. Terra Firma claims that Citigroup defrauded Terra Firma in the purchase of EMI. Resource for this article – Investment firm Terra Firma loses lawsuit over EMI by Personal Money Store.
EMI bought by Terra Firma
The British business Emi had been bought by Terra Firma in August 2007 for $6.8 billion. This was all before the credit markets stopped in Oct 2007. Citigroup funded the purchase. Billions are lost by Guy Hands, the person controlling the Terra Firma fund, since then. He has additionally been the target of frustrated investors who aren’t happy with the fact two-thirds of the fund is tied up in the quickly shrinking Electronic and Musical Industries.
A court docket case with Terra Firma and Citigroup together
Citigroup, which funded the Terra Firma purchase of EMI, has been on the defensive. The suit comes from Terra Firma to Citigroup. Terra firma believes that, with the Emi purchase, it was defrauded. It had been not a “bidding war” to get EMI. This is what Terra Firma was led to believe. Citigroup did not defraud the Terra Firma purchase which was decided by a unanimous jury.
What is next for EMI?
EMI is a music label in Britain. It’s one of the largest in fact. Musicians as diverse as Lilly Allen and also the Rolling Stones have been or are on the EMI label. When Terra Firma and Guy Hands took over the label in 2007, spending had been slashed at every corner almost instantly. Many large acts, including as the Rolling Stones, decided to leave the label. EMI cost Hands more than $8 billion he says besides cost cuts. Hands might be losing his job soon. This will come from Electronic and Musical Industries and Terra Firma. The lawsuit made Citigroup kind of mad. This is why the company is “much less likely” to get any Electronic and Musical Industries refinancing done. This could leave the musical industry giant ripe for takeover or purchase by yet one more company.
Articles cited
Business Week
businessweek.com/news/2010-11-04/citigroup-wins-trial-against-terra-firma-over-emi-sale.html
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