Guy Hands
Years and months of debate, wounded pride, sagging financials, conflicting reports and more will collide next week as Citigroup and Terra Firma face off in a New York court to decide a lawsuit brought by Terra Firma’s Guy Hands alleging that he and his company were deceived during the auction process which resulted in the purchase of EMI Music. The case is made all the more personal because Hands and Citigroup’s dealmaker David Wormsley, had been friends and involved in numerous previous unrelated deals together.
According to the New York Times, “At the trial, Citigroup’s lawyers are expected to depict his lawsuit as a Hail Mary pass to try to salvage a failed investment and portray Mr. Hands as having a classic case of buyers’ remorse.” Mr. Hands says that Mr. Wormsley unfairly drove up the auction price by misrepresenting that there was another bidder for the company.”
The $6.7 billion purchase of EMI has not worked out well for Hands and Terra Firma. Despite attempts to lower costs and trim expenses, the private equity firm has had to inject about $150 million to keep the company doors open. Citigroup has not been able to hand off any of the $4.3 billion in loans it has on the deal and attempts between Hands and Citigroup to restructure the loans have been unsuccessful.
Terra Firma is hoping to recover $8 billion in damages plus punitive damages.
About the Author
David M. Ross has been covering Nashville's music industry for over 25 years. dross@musicrow.comView Author Profile
