Clear Channel, Lenders Reach Accord
April 14, 2008 at 4:02 AM (PT)
CLEAR CHANNEL COMMUNICATIONS and six banks, including CITIGROUP, agreed on a temporary order that bars the lenders from reneging on a promise to finance the company's $19.5 billion sale to two buyout firms, reports BLOOMBERG NEWS. The two sides reached the agreement after TEXAS state Judge JOE FRAZIER BROWN JR. in SAN ANTONIO set a JUNE 2nd trial date for CLEAR CHANNEL's lawsuit against the banks. BROWN earlier rejected the banks' request to throw out the suit and said he would hear CLEAR CHANNEL's motion for a temporary injunction.
"We are grateful the court saw through the banks' latest attempt to escape responsibility for the enormous damage they have caused our company," CLEAR CHANNEL said.
CLEAR CHANNEL's buyers, BOSTON-based buyout firms BAIN CAPITAL LLC and THOMAS H. LEE PARTNERS LP, sued MARCH 26th in NEW YORK to prevent the banks from refusing to provide $22.1 billion in financing. SAN ANTONIO-based CLEAR CHANNEL, sued in TEXAS the same day with CC MEDIA HOLDINGS INC., the shell company created for the buyout, seeking more than $26 billion in damages.
"We continue to believe the litigation brought by CLEAR CHANNEL and the sponsors is without merit and we look forward to arguing our case in court," said TOM JOHNSON, a spokesman for the banks.
Under yesterday's accord, the banks, which also include DEUTSCHE BANK AG and MORGAN STANLEY, can't terminate their financing commitments before the JUNE trial, and must retain all relevant records and documents. The merger agreement expires JUNE 12th.