It's been a while since we heard about Guy Hands, the man who borrowed large sums of cash to buy EMI and then discovered he wasn't very good at running a record label.

He's been in court this week, trying to blame his failures at EMI on CitiGroup, in a legal case which was basically Hands' Terra Firma going "waah waah, why didn't they tell us".

The fraud case was supposed to last into July - rather like Euro 2016 - but ended somewhat abruptly with a humiliating defeat - rather like England's Euro 2016.

Hands climbed down:

“Terra Firma confirms it unreservedly withdraws its allegations of fraud,” David Wolfson – standing in for lead QC Anthony Grabiner – told the hastily convened court. Terra Firma will also pay the costs of the US bank, likely to run into millions of pounds.

Hands, who had been claiming at least £1.5bn from Citi, had been questioned by the bank’s lawyer for the previous two days, and his evidence had been expected to last into next week. He had faced repeated questions about his recollection of events in 2007 when Terra Firma took over EMI just before the credit crunch and had been accused of having a “hazy memory”.

At one stage during his questioning of Hands, Mark Howard QC, representing Citi, said: “The problem is, Mr Hands, your story is shifting and it is impossible to reconcile these different versions.”

Much as EMI had relied on releasing poorly-conceived best of 'special edition' collections, Hands was trying to sell a bunch of remixes of old material, but the court wasn't really buying.

His case having crumbled underneath him, Hands was left trying to whistle a brave tune:

Hands, who was not in court, said the latest claim had been brought in good faith. “However, it has become evident that our documentation of the fast-moving and complex events, and memories of these events after nine years, are no longer sufficient to meet the high demands of proof required for a fraud claim in court,” he said.

“The matter is now closed,” said Hands, saying that the Terra Firma business he founded in 2003 was looking to the future. “We have an exciting portfolio of companies, a talented and experienced team, supportive and loyal investors and €1bn of capital to invest,” he said.

It's funny, isn't it, that he hadn't noticed he couldn't remember all that "fast-moving" stuff until he'd been taken to pieces on the stand.

And while Hands might believe the matter is closed, that isn't entirely true. Terra Firma have agreed to pick up all of Citi's costs. That Billion of capital might be whittled down a bit in the coming weeks.

The Terra Firma dream is over: Citi have seized control of EMI in lieu of unpaid debts.

Naturally, Citi are convinced it's the best thing all round:

Citi vice chairman Stephen Volk said EMI now had a strong balance sheet and "the ability to invest in and grow its business".

"This is a positive development for EMI, its employees, artists, songwriters and suppliers. EMI is an iconic business and we are completely supportive of both its management and its strategy," he added.

Wow. The one thing you can say about EMI is that it's been poorly managed and pursuing a rubbish strategy for the last few years - otherwise it wouldn't have defaulted on its loans and been taken over by Citi in the first place. It's a bit like someone trying to rescue a drowning man and saying that they'd like the drowner to continue with the flailing and vanishing under water.

The Citi takeover does relieve some of the debt Terra Firma larded onto EMI - now the company just owes £1.2bn instead of £3.4bn. That's good news - now EMI is just lumbering under an unimaginable debt instead of an unconscionable one.

Citi will be looking for a buyer. Good luck with that, Citi. For the time being, EMI will be run by bankers who don't understand it instead of by financial experts who don't understand it.

Terra Firma is still considering appealing against the findings of the New York court which said that Citi hadn't defrauded them when helping the EMI sale. If they do, that might make it harder for Citi to sell EMI on until that question is settled.

It's lovely of Guy Hands to give No Rock And Roll Fun a tenth birthday present, with a move that demonstrates everything the music industry has been doing for the past ten years: blaming someone else for its woes, blindly pursuing legal action that has failed before; tossing good money after bad; alienating the very people it needs the support of; having trouble with the twenty-first century and just generally showing an incapacity to move on. In fact, the story was only a Gennaro Castaldo short of a full house.

Terra Firma have filed an appeal against their defeat in the the lawsuit against their own bankers.

Now, it might be that there's grounds for appeal - although, to be frank, it sounds like Terra Firma have produced a list of quibbles rather than any major flaw in either judgement or process - but the appeal process could drag on for months and months. And every quarter, EMI is finding it harder to meet its financial obligations.

Doggedly fighting on might seem like a heroic action, but Guy Hands is standing in a burning boat arguing about who started the fire instead of calling the fire brigade. This is an act of vanity.

Like Molly's baby, Mute has been dragged from the carnage of the EMI tram-crash and has slapped out a press release about a new, all-in-business.

Strictly speaking, of course, Molly's baby hasn't slapped out a press release, so don't treat that as part of the extended metaphor, okay?

Following the recent announcement that Mute has reached an agreement with EMI Music which sees the company, led by Daniel Miller, return to being independent, Mute now announces details of the new structure which sees the record label, publishing company and a new artist/producer management company brought together under the Mute name.

Says Daniel Miller; “I am excited about this new phase in our development. The things we value most - our relationships with artists and our desire to embrace new ideas and ways of working – can now be fully realised in a structure I have been aiming towards for some time. This is the ideal time and perfect opportunity to bring three key elements together under the Mute name”.

Some artists aren't escaping, and will remain inside EMI. These musical Ashleys will still have their last rites taken care of by Daniel Miller, who is going to freelance for EMI.

Which is wonderful - not only has he got his label back, but his work at Mute is going to be subsidised by EMI. Terra Firma are brilliant at music, aren't they?

The Citigroup v EMI trial wasn't a total disaster for Guy Hands. Sure, the jury took hardly any time at all to kick Hands' claims out of court, and it now looks inevitable that Citigroup will take control of EMI, and Hands' reputation lays in tatters.

But at least he managed to be humiliated in New York, so it won't affect his tax status. So that's a plus, right?

The case was never going to fly, and given that Citi could point to Guy Hands' close friendship with David Wormsley remained close even when Hands had twigged the banker had diddled him it was probably foolish to even start the action.

And that was before Guy Hands stood up in court and said actually, he didn't even recall much about being defrauded, now you ask:

Terra Firma Capital Partners Ltd founder Hands, pressing an $8 billion damages claim against Citigroup, also testified at trial in New York that he had no document to support his allegations banker David Wormsley lied to him in three phone calls about a rival bid.

During hours of tense cross-examination, Citigroup trial lawyer Ted Wells asked Hands: "The only thing you can remember is the conversation with David Wormsley and chocolate biscuits?" from a May 20, 2007 Terra Firma board meeting.

Hands replied: "That is correct, in detail."

He said he could remember "how close the plane was" at the meeting in an airport hangar on the English Channel island of Guernsey, but not the meeting details or documents.

He said he remembers being hungry and asking for chocolate biscuits to eat.

How on earth did Hands think this was going to come off well for him? Was he hoping that he could enter an empty Tunnocks Teacake Wrapper into the court to support his entire case?

Hands has done the remarkable in the current climate and made the world feel a bit sorry for a bank. Indeed, there was a juror who got special thanks from Michael Moore for constructing an anti-bank movie, and even then Hands couldn't find any support.

It perhaps says it all that the lead Terra Firma counsel didn't stick around for the verdict. He'd already moved on to the next thing.

Of course, it's not inevitable that Terra Firma will lose EMI. But given that it's struggling to keep afloat, and relying heavily on the kindness of its main creditor, dragging that creditor to court and calling it fraudulent might not have been the shrewdest move.

It's horrible for EMI, and the people who work for EMI. You know what's funny, though? Even after a half-decade of terrible decisions, it's unlikely Hands is going to suffer as much as those whose employment depended upon him.

It's worth remembering that Guy Hands insisted on the trial taking place in New York rather than the more appropriate London, because if he came to London it would wreck his tax dodging scheme. (I know that technically he is avoiding rather than dodging tax - he's behaving legally, if unethically, but let's not pretend that he's just really clever rather than a greedy man who wants to avoid paying his share to the nation that raised him.)

It's looking likely that Guy Hands has managed to just about scrape together the cash to keep hold of EMI for a little while longer. USD105million, all of which will go into the debt pit that Terra Firma has dug, and all of which just keeps the beast limping on until March next year.

Meanwhile, with the cash they can get going on feeding the debt, no word on what EMI intends to do for actual money. I'm sure there's a plan, though, right?

I'm fully expecting to see a forthcoming episode of The Apprentice where Alan Sugar puts his hapless contestants in charge of running EMI for two days. Surely, surely, that would be the only explanation for the insane decision coming from the crumbling edifice?

EMI is in talks to mortgage its back catalogue of music recordings in a last-ditch attempt to solve its mounting cash crisis.

The group is offering rival labels the chance to manage its North American catalogue business, which includes tracks by The Beatles and Blondie, for a five-year period.

Managing and monetising back catalogue is what your business is, Hands. And that would be your biggest market. What would you have left to 'save' by doing this? It's a bit like McDonalds saying 'tell you what, we'll hand that selling burgers and chips business over to someone else to ensure that we're able to continue the vital work of distributing drinking straws and tiny packets of ketchup around the country'.

Admittedly, the idea that no other company in the world could treat the EMI catalogue business as badly as Terra Firma does must make the idea seem appealing, but since all you're doing is replacing an 'in distress' flag with a 'surrender' flag, what's the point?

Still, at least the Terra Firma guys would take care who they passed the business off to. I mean, at least by flogging off the catalogue, you're keeping it out the hands of your rivals, right?

Talks on a deal began in recent weeks with Universal Music, but have since moved on to include Sony and Warner Music.

Righto. So - in order to save your company - you're planning on handing over one of the few profitable parts to your competitors?

Guy, I know you've proved adept at running the toilets on the German motorway network, but if you'd take the advice of someone who did Economics A-Level, shoveling money from your bank into the accounts of the people you're in competition with might be a bit of a rotten idea? Because when you're all trying to sign the next New Beatles, or new N-Dubz, or whatever, they're going to be able to offer more cash. Because they'll have the money you should have earned.

Hey! Hey! You guys - let's stop worrying about Citigroup taking EMI over because we screwed up when we borrowed the money to buy the company. Let's just have some fun. I'll switch the lights off, we can all move about, and then I'll switch the lights on again and we can see who is going to be in charge for the next few weeks. Fun, huh? Alright... off go the lights...

... and on they come again.

Elio Leoni-Sceti has been dumped as CEO; Charles Allen out of the Twilight Of ITV moves from being a non-executive chair to executive chair.

There's an official statement:

Charles has been non-executive Chairman of EMI Music since January 2009, chairing its Board and supporting the transformation of the business. Elio Leoni-Sceti, EMI Music’s Chief Executive, who has successfully led EMI Music through the first phase of its operational turnaround, will be leaving the company on March 31st 2010.

Yes, Elio's been a rip-roaring success. So, erm, naturally, we're getting rid of him. It's what you do when someone's been successful in phase one - dump him and bring in someone EQUALLY SUCCESSFUL to look after phase two. And the guy who helped ITV Digital be all successful by losing £1.4billion, he's the guy for the job, right?

Charles said: “Elio has done a great job. I have thoroughly enjoyed working with him; he is a very talented executive and we all wish him well in the future. Our goals for EMI Music remain the same. I will support and guide the group’s strong team, keep EMI’s focus on creativity and superb A&R, and deliver a digital platform. This is a great business – our task is to ensure it has a great future."

EMI has a focus on superb A&R? Or is Allen still being as satirical as when he claimed that Elio had done a great job?

Elio added: “EMI is a wonderful business with a great team and new creative and operational momentum. My job here is now done and it is time for me to move on. It has been a pleasure to work with Charles and so many other talented and committed people. I look forward to seeing the company go on to further success in the future.”

... the sort of successes that I have brought them. In other words, I hope they ALL have to cram their belongings into a filing box and shuffle out to the car park while someone - probably the drummer from Starsailor - unscrews the nameplate on their office doors.

Elio's departure may or may not be related to documents just filed in a US court which told a completely different tale. Business Week reports:

In a letter to Hands, part of court documents filed Feb. 4 in New York, Leoni-Sceti had written that morale at the company had reached a low and that artists were questioning whether to stay.

EMI is in talks with artists, “all of whom are questioning to some degree whether it is wise to continue a relationship with EMI,” Leoni-Sceti wrote in the Oct. 2 letter, saying their concerns were sparked by a Citigroup report on EMI’s prospects. Hands had named Leoni-Sceti to the top job in July 2008 with no music industry experience.

But - hey - it's all success, success, success if you ignore that.

Just to underline how successful EMI is with all these talented people running it, Business Week adds that OK GO have dumped the label and Queen and Pink Floyd are thinking of taking their back catalogue elsewhere.

As he struggles to try and stop Citi taking EMI from Terra Firma, a document emerges showing that Guy Hands proposed breaking up EMI late last year.

His vision? Split off the bit that makes money (publishing) from the bit that sucks out the cash (records).

Though Citigroup rejected the proposal, Mr. Hands wrote that "we believe that we are in agreement in relation to a number of the key components of an acceptable solution including the need to separate the two businesses."

Mr. Hands's proposal focused on fixing the financial structure of the two divisions, and didn't discuss operational strategies.

"So one of your kidneys is totally broken, our plan is to rip out the good kidney and give that to someone else. That way, at least your good kidney has a chance."

Still, all this interest in the future of the business must make interested parties delighted? Citi and Terra Firma suggesting strategies? Two heads are better than one, right?

Eh, Wall Street Journal?

A filling last week from Terra Firma shows the harm the tug-of-war over the business and the bad publicity surrounding the deal is causing. In an email to Mr. Hands in early October, EMI Music CEO Elio Leoni-Sceti wrote that in the first nine months of 2009, counterparties' concerns about EMI's stability caused the company to lose distribution deals that would have gen rated income of $13 million a year. "Not only are artists and artists' managers raising concerns but morale within the company has reached a low point," he wrote.

The guys at the Brits tonight in a sealed plastic tent? That'll be the EMI table.

Having screwed up EMI, loaded it with debt and sent it churning towards oblivion, you're unlikely to see Guy Hands outside Abbey Road studios anytime soon.

It turns out he's so mean, to avoid paying tax he won't even go and see his family:

Guy Hands, who moved from Kent to Guernsey last April in protest at higher income and capital gains tax rates, says he has "never visited" his school age children since he left the country. They have remained with his wife at their former family home in Kent and they now have to travel to Guernsey to see him.

Neither has he visited his mother and father – and wouldn't unless there was a family crisis: "I do not visit my parents in the United Kingdom and would not do so except in an emergency."

You wonder what would constitute an emergency large enough to shake Hands into a trip to the UK? Because, clearly, family ties are so much less important than keeping as much money as you possibly can.

Hands, by the way, is boasting about how much of a selfish moneygrubber he is - he's using this example of his extreme selfishness as an argument to try and stop Citigroup being allowed to hold the Terra Firma court case in London:

In a personal statement lodged in New York's southern district court Hands says he faces a top tax rate of 64% on earnings from employment from April, plus 18% CGT. He says he has been an "outspoken" critic of UK tax levels and fears that the Revenue will be watching him closely to ensure he does nothing that could threaten his move to obtain non-resident tax status.

Hands hasn't actually been able to explain why a country that has given him so much should be denied tax revenue that everyone else has to pay, nor why his meanness should be a determining factor in where a court case is held.

How would it be if someone facing court tried to argue the hearing shouldn't be held in, say, Liverpool because he doesn't fancy stumping up for the train fare?

Still, on the bright side, Hands, if you do have to come to the UK to fight your case, you might be able to pop in and see your parents. If they'll open the door to you. Not that they wouldn't want to, but they might be trying to save the cost of wear and tear on the hinges.

You hear a lot about how terrible it is being a record label these days - but they're still quite nice little businesses. In fact, if they started to spend less time trying to force the world not to change, they could have a happy life making hundreds of thousands of pounds every year.

Take EMI, for example. £300,000,000 earnings before tax and write-downs last year. Sure, it's not an oil company, but it's a nice business. Not even managed decline, is it? Manage the reinvention of the business, and you'd be fine.

That is, unless you did something stupid like loading the company down with millions of debt it barely has a hope of repaying. That sort of stupid.

What's that, Robert Peston?

EMI's results for 2009 will show that it generated earnings before interest, tax, depreciation and amortisation of around £300m.

Multiplying that £300m by six or seven - the standard valuation multiple these days - gives a notional value for the whole of the recorded music business of something like £1.8bn.

That's good, right?

Now EMI was bought by Guy Hands' Terra Firma private-equity firm for more than $8bn in the autumn of 2007 (note that I have now switched into US dollars)

That takeover was financed with of $3bn of equity, provided by Terra Firma and its backers, and with $5bn of debt, provided by the giant US bank, Citigroup.

And just a few months ago, Terra Firma put in a further $500m of equity.

So if the business is now worth £1.8bn, that is equivalent to $2.8bn at today's exchange rate.

In other words, then...

Which means that every single cent of Terra Firma's equity has been wiped out. It also means that Citigroup is facing a loss of more than $2bn on the loans it provided.

The total loss for Terra Firm and Citi together would be something like $5.7bn.

Of course, Terra Firma has a plan. You don't look at a company struggling under piles of piles of debt without coming up with a cunning plan.

However, to use the jargon, those covenant breaches [when EMI breaks its banking promises] can be "cured" if Guy Hands can persuade Terra Firma's backers to stump up £120m in the next month or so.

Ah yes. Put more money in to the company. That makes sense. Let's just hope nobody stops to notice that it would take EMI two years to actually earn back that £120 million.

Hands grand plan seems to be asking backers to fund an even higher wall for spunking cash up against. Who wouldn't fall for that, eh?

[Thanks to @alanconnor]

It's a scene that will be played out many times this week - single people finding themselves suddenly being forced to meet others, chosen by their mothers or friends. Others who would "be perfect for you", who "has so much in common with you". Others who, clearly, they want you to hook up with. Whether you want to or not. Because, from your family and friends' point of view, any partnership is better than nothing.

It's happening to Guy Hands, too, with Citibank pushing Terra Firma in the direction of other companies, hinting that their money could be a great fit for EMI, and suggesting that the pair really should talk:

It has approached two private equity firms, Warburg Pincus in the US and EQT in Sweden, and the door is also open to Warner Music, which has long been viewed as a buyer of EMI, despite regulatory obstacles.

Failing that, Mrs Williams' son is back from university. He's studying to be a doctor. You could do a lot worse, EMI. You could do a lot worse.

Citigroup is starting to panic that EMI is going to default, which would leave them trying to run a record label. Hence the panic to find a suitor before that happens. Clocks are ticking.

While they're desperately trying to find someone willing to invest in their business, Terra Firma are trying to shift the blame for their ridiculous investment in EMI. They're suing Citigroup for fraud.

Oh, yes:

British equity firm Terra Firma Investments has sued Citigroup Inc., claiming it paid a "fraudulently inflated price" of 4 billion pounds for EMI's label and music publishing interests in 2007 as a result of misrepresentations made by the lender. In the action, filed Friday in New York Supreme Court, Terra Firma claims to have lost equity in the billions of dollars as a result of its heavily leveraged purchase of the struggling music company.

The suit adds that Citi has "sought to wrest control of EMI by pushing it into, or to the brink of bankruptcy."

I'm sure that everyone was saying how clever Terra Firma were back when they were buying up EMI, detailing the wisdom of Hands and the shrewd investment choices they were known for making. Now, it seems, Terra Firma are trying to convince us they were like country schmoes, turning up and being duped by a naughty bank.

Sure, everyone hates banks and bankers, Terra Firma. But they also hate private equity groups. And a private equity group trying to claim it was bamboozled by a bank elicts very little sympathy in the real world, as your claim seems to consist of whining there weren't enough people to sack and assets to flog off to keep your profit levels aloft.

Still, good luck with seeking someone to put a billion quid into a business you're simultaneously claiming in court is fundamentally flawed. Let us know how that works out for you.

Hey, there's no problem at EMI, right? It's just that Terra Firma are desperately trying to find a billion quid to prop the company up.

But, hey, right now it's able to cope with being £2.6billion in debt, it's just worried that if something bad happens, it might have to hand the whole thing over to Citibank.

Citibank - can you imagine them trying to run a record label? They can barely cope with running a bank.

EMI are trying to sound upbeat, but the disappointing performance of the Beatles remasters and the general yawn which met the return of Robbie Williams can't be helping steal nerves at Terra Firma.

The real question, though, is if you had a billion quid, why would you throw it in the debt hole? Wouldn't you wait for the collapse and use it to buy the decent bits of EMI in a fire sale?

Guy Hands has more or less admitted that buying EMI was a rotten plan:

Guy Hands, founder of private equity firm Terra Firma, on Thursday admitted that if the May 2007 auction for music group EMI had happened two weeks later, he would never have bought the company, by far his biggest investment.

It's a little hard to think why he might have spotted the strange smell coming from the building had he waited fourteen days, having missed what everyone else could see when he did do the deal.

Still, he's excited for this year:

Meanwhile, on the operating front, EMI is making progress, Mr Hands added, noting that he expects earnings to reach £200m next year while the re-release of The Beatles recordings has been a huge success.

Really? A huge success? If it had been, that EMI is relying on a forty-year old product would be enough of a worry. But you'd have to suggest that the Beatle churn resulted in 'not an embarrassment' rather than a huge success.

As if it wasn't hard enough trying to keep EMI afloat with nothing more than a promise to do something sometime from Chris Martin, things are looking grim for Guy Hands on a personal front now.

The New York Times is reporting that HMRC is taking a close look at his claims to be a Guernsey resident for tax purposes:

[H]is lawyers hope to make the case that not only are the funds of his company, Terra Firma Capital Partners, administered in Guernsey and all the main investment decisions taken here, but Mr. Hands also has publicly vowed not to set foot again in Britain for the immediate future. If so, that should establish beyond a doubt that he is a resident of Guernsey.

But others are not so sure. Tax experts point to the fact that his wife, who owns their stately home in the Kent countryside southeast of London, runs a hotel business that is based in Britain. Three of his four children still go to British schools and the majority of Terra Firma employees, about 60 in number, are based in its London office.

While the lawyers argue about if it's legal or not, the "is it moral" question is much more easily settled, don't you think?

The FT is reporting that investors in EMI have agreed to Guy Hands' injection of £300million into the group:

Mr Hands is understood to be working with Barclays, JPMorgan and Morgan Stanley on a plan to raise £200m-£280m from a high-yield bond issue that could repay some of the debt EMI owes to Citigroup.

Repaying debt with more debt. All very inventive.

Perhaps they should just stick to mucking about with financial instruments and forget the whole making records thing? They seem much better at the one than the other.

The team at Terra Firma will be opening extra bottles of Orangina this morning, as EMI share figures that look better than you might have expected.

Partly, this is down to a reduction in returns (a digital dividend - less physical product means less unsold physical product) and cost savings (or sacking people, as it's also known), but mainly? It's because of currency fluctuations:

Net sales increasesd just 4% io £1,072 million ($1612M USD). Excluding the currency impact, sales were down 10%, slightly more than the contraction in the overall industry.

So EMI's success is mostly down to the change in the value of the pound. To be fair, persuading banks to back the Terra Firma takeover of the company, EMI did do a small bit to help hasten the economic doom, but I'm not sure they'd suggest that it was part of a strategy to turn the company around.

Even with the real decline in sales, though, it's worth noting that EMI still had revenues of £163million - the old music industry's claims of penury are a little overplayed.

There's been some suggestion from crueller corners of the internet that Terra Firma are failing at running EMI because they don't know anything about music.

They seem to have taken on board the criticism, as EMI have just announced a plan which plays to their knowledge base: issuing credit cards.

Oh, yes, "top" EMI artists will soon be appearing on special credit cards. The combination of flattering the vanity of famous people, offering the chance to achieve a veneer of cool by having your daily business connected to music in some way, and stacking up loads and loads of unmanageable debt: it's a very Terra Firma indeed.