Valerie sent this article under the subject header, “Never trust a man named Wormsley”. True. But when things are rotten to the core, there is sweet irony in having a Wormsely and a Guy named Hands, pictured below, battling things out in court- and with both once having been thick as thieves.
“Awwwww, fuck! I’ve been Wormsleyed!” Guy Hands suffers from severe financial constipation.
Here’s where and how a Wormsely trumped the Guy:
Terra Firma Capital Partners, the private equity firm controlled by Mr. Hands, sued Citigroup in New York, accusing the bank of defrauding him during the auction of EMI. He alleged that David Wormsley, Citigroup’s star British banker and his once-trusted adviser, lied to him three times that there was another bidder for EMI. Mr. Hands said those misrepresentations duped him into paying $6.8 billion for the company.
“We are very pleased that the jury reached a unanimous verdict confirming what we have said from the beginning: that Citi and David Wormsley treated Terra Firma with honesty and integrity in the EMI transaction,” a Citigroup spokeswoman said in an e-mailed statement. “The jury’s verdict makes clear that Terra Firma’s irresponsible accusations of fraud were nothing more than a misguided attempt to gain leverage in debt restructuring negotiations.”
A spokesman for Terra Firma said the buyout firm reserved its right to appeal.
“We are disappointed that the jury found that we did not prove that we relied on misrepresentations from Citi which caused a loss to our investors,” the spokesman said in an e-mailed statement. “We believe that this was an important action to bring and that we had a responsibility to our investors to bring it.”
You can read all the gory details here: http://dealbook.blogs.nytimes.com/2010/11/04/citi-prevails-in-lawsuit-over-emi-deal/?src=twt&twt=nytimes=
After that, wonder- if you have 5 minutes- about the implications of this case. But if tired of all this “Hands-wringing” and how Terra Firma should have stuck to fixing up toilets on the Autobahn and avoided looking at making a quid by acquiring an already-badly limping and severely wounded music company, here are some of the more interesting “factoids”:
“Citigroup’s lawyers depicted Mr. Hands as having buyer’s remorse. And Mr. Wormsley testified that he never lied to Mr. Hands.
“Rather than taking responsibility for making a mistake, he turned around and filed this lawsuit,” Theodore V. Wells Jr., the lead lawyer for Citigroup, said. “He made a bad business decision and is trying trying to shift responsibility to Citibank.”
That bad business decision has cost Mr. Hands dearly. EMI has struggled mightily since it was purchased by Mr. Hands, who testified that he has 60 percent to 70 percent of his wealth tied up in EMI. His fund, Terra Firma, has lost about $2.5 billion on the investment.
“Guy Hands couldn’t fight technology,” Mr. Wells said in court on Wednesday, addressing the woes of EMI and the rest of the music industry. “No one’s buying records anymore.”
What’s interesting and also shockingly true and frank [Sinatra] is this line: “No one’s buying records anymore”. And if they are not, why are all these unknown artists still recording “stuff”.
Sorry to pour cold water on dreams and passion, but if making music is a hobby, fine. If a career, think twice before making that record and then asking, “And now what?” Even with “plans” in place, nothing is certain and without an investor or a sponsor/brand behind you, the odds of moving forward are around 100 to 1.
One of the very few people I respect and trust in the entertainment business, took me aback somewhat recently when, discussing artist management, he replied to an email saying, “There is no money in management”. And said person’s company- or former company- manages a slew of artists.
What he meant- I think- was that unless an artist absolutely blows you away and comes with all the boxes ticked, you won’t pass Go, you’ll never collect that $200 and you would have wasted a great deal of time and energy- all of which is money. That and having a very diverse management portfolio.
Signing up musical artists to “management” and without all the right connections and all the right moves to get them seen and heard- and sold- is not a betting proposition. Not when, “No one’s buying records anymore”.
Not just that, but, very sadly, very few seem to care about the art of crafting and producing music anymore.
Technology has replaced writing songs and Bling and selling a lifestyle has replaced real musical talent. The new “musicians” are entrepreneurs and hard-nosed businessmen.
We now leave you with this sad- and telling photo- and which signals the end -to date- about this ongoing saga between EMI and Citigroup and which seems to have finally met its maker. Let’s hope so.
All these lifelines thrown at EMI over the past one year and all the memos about “re-structuring” and all the Leoni-Scetis, Charles llens, Roger Faxons have all become one giant snoozefest.
Demolished: The jury rejected Guy Hands’ claims against David Wormsley, right