According to court documents filed in New York, the chairman of Terra Firma Capital Partners Ltd., owners of EMI Group, proposed to break up the music company in November. Guy Hands proposed splitting the group’s music publishing and recorded music divisions in a letter to their lender, Citigroup Inc., the Wall Street Journal revealed, calling it “essential.” Citigroup rejected the proposal, which would have separated the struggling recorded music division (which includes Virgin and Capitol) from the healthier music publishing division.
The report came to light as a result of legal action between the two entities. Last year, Terra Firma asked Citigroup to write off $1 billion of EMI’s debts in return for them pumping as much money into the recorded music group, which Citigroup refused. Terra Firma has since launched legal action against Citigroup, claiming that they gave them bad advice prior to the purchase of EMI in 2007. Also uncovered in the court filings was an internal memo from EMI Recorded Music chief Elio Leoni0 Sceti claiming that morale among their staff and artists was at an all time low. EMI Group is the fourth largest record company in the world.
