Guy Hands returns to court over EMI seizure
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Thursday 08 September 2011
Guy Hands, the former private equity owner of EMI, has gone back to court over Citigroup's seizure of the music business earlier this year.
Mr Hands' Terra Firma vehicle wants PricewaterhouseCoopers (PwC), the accountancy firm that acted as the administrator for EMI's parent, to hand over the valuation documents that were used when Citigroup took control via what was the biggest pre-pack administration in the UK back in February. The bank was owed £3.4bn by EMI following Mr Hands' debt-funded buyout of the business in 2007.
Citigroup and PwC declined to comment on the action, which comes as the bank attempts to sell off the business. A hearing is not expected until the end of this year.
A source close to the situation said Terra Firma had been asking the administrators and the bank for the paperwork since February, and had resorted to court when the documents were not forthcoming. The source added that the US bank had not explained why it had decided to take control, given that the private equity group had always made its interest payments.
Peter Spratt and Tony Lomas of PwC were appointed as joint administrators of Maltby Investments Limited (MIL), the holding company of EMI and its subsidiaries, on 1 February.
At the time, Mr Spratt said: "As a result of a default under MIL's loan facilities, and the subsequent acceleration of the outstanding debt, Tony Lomas and I were appointed as administrators."
He added that the subsequent sale to Citigroup had "enabled ownership of EMI Group to transfer without any disruption".
The action over valuation documents comes after Mr Hands took Citigroup to court in the US last year, claiming that Terra Firma had been misled into overpaying when it bought EMI. The court ruled in favour of Citigroup.
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