EMI's Final Resting Place

Is EMI headed the way of Vanilla Ice?

Most holiday presents aren't accompanied by a fat load of debt, but Citigroup may end up in control of EMI — and accompanying liabilities estimated to be as high as $3.5 billion — by Christmas.

The venerable record label, home to The Beatles, Pink Floyd, Frank Sinatra and others, was acquired by British financier Guy Hands's firm Terra Firma for $6.7 billion in a 2007 leveraged buyout. Citi provided Hands with a $5 billion loan to make the deal happen...