Guy Hands And Citigroup Are Back In Court Monday
October 14, 2010 at 4:26 AM (PT)
Beginning MONDAY, OCTOBER 18th, a battle between TERRA FIRMA CEO GUY HANDS and CITIGROUP INC. begins in a NEW YORK courtroom over the ongoing dispute over the $6.5 billion takeover of EMI. HANDS' equity firm took over the music label in a highly leveraged deal largely financed by CITIGROUP in 2007.
The purchase happened at the height of the market, and since the deal has soured. THE WALL STREET JOURNAL reports, "declines in the recorded-music market, already significant, accelerated, and the financial crisis made a debt-syndication deal all but impossible, leaving CITIGROUP holding about GBP3 billion of deal-related debt. EMI continues to struggle to meet banking covenants, while CITI has refused to renegotiate the debts."
"EMI still faces considerable financial challenges," said MALTBY CAPITAL Chairman STEPHEN ALEXANDER to THE JOURNAL. "The group has GBP3.04 billion debt outstanding that falls due for repayment between 2014 and 2017."
Last month (NET NEWS 9/17), HANDS won a round in court in his ongoing battle with CITIGROUP over the future of EMI. That ruling by NEW YORK Judge JED RAKOFF, gave HANDS the right to have allegations of fraud against CITIGROUP to proceed to this upcoming trial. CITI had asked a federal judge last week to grant a summary judgement in their favor (NET NEWS 9/10)
The case will be heard by Judge JED RAKOFF.