Curiously, disastrous deals often lead to disastrous lawsuits.
But the sparring Citigroup and EMI-owning Terra Firma are now tentatively working to resolve their legal differences. Sources conflict on the timing of the acquisition-related “sit down,” though a Dow Jones report pegs a preliminary meeting next month. The Guy Hands-led Terra Firma initially sued Citi for allegedly pretending that multiple bidders were interested in EMI.
The presence of competing buyers typically spikes the buyout price, and Citi had plenty of incentive to create shadow bidders. But emotions are also critical to this lawsuit. The once-confident Hands is now getting soiled by the pile he ended up acquiring, and the facilitator of that ill-informed buy was the once-liquid Citi. In the here-and-now, a just-released annual report shows that EMI remains at serious risk for default, despite a spate of recent cash injections.
A trial is set for October 18th if mediation talks fail.