Banks Ask Court To Dismiss Clear Channel Suit
March 31, 2008 at 4:49 PM (PT)
It's now the lenders' turn to ask the court for help in the CLEAR CHANNEL imbroglio, with CITIGROUP and its partner lenders filing in a NEW YORK state court to dismiss part of CLEAR CHANNEL's suit against them for walking out on the deal.
The lenders, including CITIGROUP, WACHOVIA, DEUTSCHE BANK, CREDIT SUISSE, MORGAN STANLEY, and ROYAL BANK OF SCOTLAND, cite NEW YORK state law that bars the use of the docrtine of "specific performance" in a lending contract.
CLEAR CHANNEL and its private equity partners won a temporary restraining order from a TEXAS court last week to stop the lenders from refusing to finance the deal, but the banks say they are willing to negotiate and are "ready to honor the Commitment Letter and reach a funding agreement on mutually agreeable terms," according to a statement from the lenders.
The banks have separately moved to transfer the TEXAS case from state to federal court.