Stephen Foley: The song may have ended but for Guy Hands, the malady lingers on

US Outlook: It is sometimes said that to understand is to forgive, but that won’t apply to David Wormsley.

Maybe Citigroup’s star dealmaker can see why Guy Hands launched his spectacularly backfiring lawsuit against the bank over the 2007 takeover of EMI, but no one should expect him to forgive his erstwhile friend and associate.

There are a lot of wounds being licked this weekend following Mr Hands’ disastrous attempt to strengthen his hand in refinancing negotiations over EMI. It has been an intensely personal drama – obviously, since both men called each other liars from the witness stand.

As trial lawyers worked to render comprehensible the complexities of a multi-billion pound deal, it has often seemed as if neither side’s simplified, stripped down version of events reflected reality. In breaks outside court, when Citigroup was presenting its case, Mr Hands would often proffer that “it’s all bullshit”. In fact, that was the conclusion – the very speedy conclusion – of the jury as regards to his own case.

The bottom line is that there was absolutely no evidence that David Wormsley lied. As he returns to London to throw himself back into his work, after a few days rest, he will have to deal with upset among some other private equity firms over how he passed information about their bidding tactics to Mr Hands. But this was only after-the-fact information, and no confidences were breached, so he ought to emerge unscathed.

No doubt Mr Wormsley can see why the court case happened, Mr Hands was cornered, facing losing billions on the EMI deal, grasping for whatever leverage he thought he might find. But to understand that won’t make it any easier to forgive him for launching the all-consuming dirt-fest that is a modern American lawsuit.

There was someone watching the proceedings with glee. Who should be at the back of Court 14B these past three weeks but a representative from Warner Music? EMI’s long-time rival and sometime suitor still harbours ambitions of taking over the British music icon. I am not sure that that day has got very much closer.

When everyone goes back to work on Monday, the future of EMI will be just about as unclear as it has been for the past couple of years. Its roster of stars, including Coldplay and Kylie and Lily Allen, are not earning enough to keep up with the massive debt load piled on to the company when Mr Hands’ private equity house, Terra Firma, took it over in 2007. So that status quo is not sustainable.

So far, Mr Hands has been able to scrape together enough money for cash injections to keep the company from falling into its lender’s hands. While the court case was ongoing, it was all part of the game to keeping EMI ticking along with new money. Put it on the same tab as the lawyers’ fees.

With the failure of this last-gasp attempt to win compensation from Citigroup for supposed wrongs during the bidding process, that must surely now stop. Mr Hands might already have thrown too much good money after bad, and behaved with such ill-grace, that he will no longer be able to attract backing from private equity investors in the future. For two years some have considered Terra Firma’s stake in EMI to be worthless. Salvaging his reputation involves re-engaging quickly and constructively with the refinancing negotiations with Citigroup, which have been on hiatus for the duration of the trial.

What happens next is entirely in the gift of Citigroup. It may continue to offer Terra Firma, as it did before the trial, a chunk of equity in a refinanced EMI, in return for expediting a resolution. Both sides appear keen to get back to the negotiating table.

As for Citigroup’s eventual exit, there is really no hurry. Warner’s was the only realistic offer on the table last time out, and the cost-savings to be had from putting the two together make it the buyer best able to pay a decent price. But Citigroup will be no more desirous of a competition inquiry than EMI’s shareholders were, if there is an alternative. The shifting landscape of the music industry means that the bank may be able to examine more creative mergers for EMI’s recorded music catalogue. Meanwhile, there ought to be no shortage of bidders for the lucrative and stable song publishing division.

After just four hours deliberation, the jury delivered a thumping defeat to Mr Hands on Thursday. But if that result was clear, the next stages in this drama are not.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
ebooksA special investigation by Andy McSmith
Life and Style
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Amazon misled consumers about subscription fees, the ASA has ruled
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn