EMI in Limbo: Terra Firma v. Citibank


Since its inception in 1931, EMI’s illustrious history of rock icons and continuous innovation has made it an industry legend.  However, even with a controlling market share in publishing, an artist roster that holds its own on the charts, and a slow but steady increase in every department’s revenue stream, their future is anything but stable.  Guy Hands, chairman of French media conglomerate Terra Firma, is the sole owner of the label.  After shelling out $6.4 Billion for the company in 2007 just before the recession took hold, Terra Firma has become increasingly unstable and chronically unable to make loan payments to its lender Citibank, who fronted $2.5 Billion for the EMI acquisition.  Convinced that his company drastically overpaid for the label due to fraudulent claims made by its lenders (specifically banker David Wormsley of Citibank), Hands is -as of Oct 18th- in the process of pursuing the dispute in court.  The final decision could be the sole determinant in EMI’s future.  If Hands is favored, then the financial burden on Terra Firma could be alleviated long enough to keep the company (along with EMI) in business.  However, if Hands’ claims are denied, Citibank will own a controlling share of the record label, leaving its future in the hands of a boardroom of bankers.

Billboard has released an update on the first hearing of the case, which on the whole, is said to last between three and four weeks.  Read the article, and let us know how you feel about these uncertain times!

-Evan

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