So it turns out that a British court will, after all, play host to the little epilogue to that bizarre period in recent record industry history when pantomime villain Guy Hands bumbled into EMI HQ, sacked everyone, threw a few billion out of the window, and then left the way clear for the British major music company to be split up and sold on abroad (I’m simplifying things slightly there, and let’s not forget, as Guy himself will tell you, it was all really the fault of the credit crunch).
As much previously reported, in 2009 Hands and his private equity group Terra Firma sued US bank Citigroup over its involvement in his audacious and ultimately disastrous 2007 purchase of EMI. Citigroup advised both Hands and EMI on the takeover, financed the deal with massive loans, and ultimately repossessed the music company in 2011, before selling on its constituent parts to Universal Music and a Sony-led consortium.
Hands accused Citigroup of providing misleading advice during his EMI takeover, adding that had he not been allegedly misled by the bankers he may not have gone ahead with what turned out to be a very costly deal. The dispute was heard in a New York court in 2010 and, although neither party came out of the proceedings looking especially good, the jury sided with Citigroup. But last year a NYC appeals court ordered a retrial, on the basis that the judge in the original hearing gave bad advice to jurors on some English law relating to the dispute.
For its part, Citigroup had always wanted the case to be heard in London, because that’s where the EMI acquisition was actually done, but Terra Firma fought hard to have the case dealt with in the US. More recently the bankers had another go at forcing the case out of the New York courts on the basis that Hands’ company had already launch separate proceedings in the UK, through a court in Manchester.
And now, it seems, the two sides in the dispute have reached at least one agreement, on the jurisdiction point. Last week the two parties said they had agreed to fight this one out in London, moving both the New York and Manchester cases to the capital’s commercial courts.
The statement read: “Terra Firma and Citigroup have together decided that their disputes should be resolved in one set of proceedings. As a result, the parties have consented to the transfer of the claim before the New York Court to England, to be consolidated with the proceedings that are ongoing before the English Court”.
So, that’s something to look forward to, isn’t it?