One of the world’s banks now owns one of the world’s largest record companies: Citibank has taken control of EMI. This is a consequence of a failed 2007 leveraged buyout of the record company, which Citibank financed. After the buyout, the record company couldn’t manage to make enough money to keep going. The buyers lost all the money they put in, £1.7 billion. Citi, for its part, has already recorded a loss of £2.2 billion on the deal, which is nearly the entire balance of its loan. Citi does not really want to be in the record business, and will try to take a hands-off approach to the management at EMI, and sell it to a new owner when it gets a chance to do so. In the meantime, EMI is sure to lose some of its important recording artists, who may not like the image of working for a bank. The Rolling Stones, Radiohead, and Joss Stone had already left EMI since the buyout, with complaints that the company had become too money-oriented to function in a creative industry.
Three small bank failures occurred tonight. These banks had deposits under $250 million, and were closed by state banking regulators.
- American Trust Bank; Roswell, Georgia, 3 locations. Successor: Renasant Bank.
- North Georgia Bank; Watkinsville, Georgia, 2 locations. Successor: BankSouth.
- Community First Bank – Chicago. Successor: Northbrook Bank and Trust Company.
A credit union was liquidated tonight. Oakland (California) Municipal Credit Union had 8,000 members, mostly government employees. Accounts have been transferred to Western Federal Credit Union.