Saturday, November 06, 2010

Guy Hands and the melting chocolate biscuit

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.