Terra Firma boss Guy Hands lost his case for fraud against Citigroup in a New York court today but neither party comes out smelling of roses.
Hands and his chums have lost £1.75bn of equity in this benighted deal while Citigroup still has over £2bn outstanding in unsecured loans on a business the court agreed was worth just £1.85bn. Hands paid over £4bn for it.
Hands’ immediate adversary Citibanker David Wormsley (‘the worm’ as he’s apparently known in the not very imaginative City of London) should be the winner in all this as the New York jury chose to accept his testimony instead of that of Hands.
But the pair of them look like spivs tossing around the reputation of EMI, once a great record company of course, and the livelihoods of the people working for it, not all of them on huge salaries and generous ‘fruit and flowers’ allocations (drugs and groupies).
Hands screwed things up from the start, trying to boss around bands like the Rolling Stones when his level was more the Counterfeit Stones. Wormsley and Citibank were clearly not giving their client the best advice. They knew perfectly well they were paying well over the odds but gambled that they could sell on the debt to some other suckers. Alas the credit crunch struck and they couldn’t.
We’ve avoided this story so far because the music industry doesn’t really seem to be media, although many dump it into that category.
But Hands’ come-uppance is worthy of note. As is the further damage to Citigroup’s reputation, in recent years it’s been one of the nastiest (as well as least competent) Wall Street banks.
They deserve each other really.