Wachovia Suit Involving Clear Channel Set For April 7th
March 5, 2008 at 5:05 AM (PT)
A lawsuit seeking to force WACHOVIA CORP to finance a deal where CLEAR CHANNEL COMMUNICATIONS would sell its TV assets to a private-equity firm will go to trial APRIL 7th, the bank said on TUESDAY, reports REUTERS. Judge LEO STRINE of the Court of Chancery, DELAWARE, on MONDAY postponed a case CLEAR CHANNEL brought to force private-equity firm PROVIDENCE EQUITY PARTNERS to complete the $1.2 billion deal, a source familiar with the cases said, in order for the case involving WACHOVIA to be heard first.
CLEAR CHANNEL agreed to the deal to sell the 56 television stations to PROVIDENCE in APRIL 2007, but the deal faltered as the markets and economy took a turn for the worse. In NOVEMBER, CLEAR CHANNEL said PROVIDENCE was considering withdrawing from the deal.
CLEAR CHANNEL filed a lawsuit FEBRUARY 15th in DELAWARE to force PROVIDENCE to complete the deal. The lawsuit was filed against "NEWPORT," a company set up by PROVIDENCE to make the acquisition. PROVIDENCE called the suit "baseless." To settle the dispute, CLEAR CHANNEL agreed to cut its asking price by $100 million to $1.1 billion, a person familiar with the situation said on FEBRUARY 25th (NET NEWS 2/25).
But WACHOVIA, one of the banks financing the deal, filed a suit in NORTH CAROLINA against NEWPORT dated FEBRUARY 22nd to get out of the financing commitment, a move that could derail the deal. NEWPORT retaliated and filed a lawsuit against WACHOVIA in DELAWARE, seeking a break-up fee and expenses unless the financing is provided. This suit will go to trial APRIL 7th.