Clear Channel Sues Banks Over Buyout Plan
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Clear Channel Communications Inc., Bain Capital LLC, and Thomas H. Lee Partners LP sued banks financing the $19.5 billion buyout of Clear Channel to force them to honor funding commitments.
Affiliates of Thomas H. Lee and Bain filed complaints in New York state court in Manhattan, and they and Clear Channel sued in Texas state court in San Antonio, where it’s based, the buyout firms said yesterday in a statement.
The banks “competed energetically in 2006 for the opportunity to provide more than $22 billion in financing,” the purchasers said in one of the New York lawsuits. “The banks have balked at their obligations due to a simple case of lenders’ remorse.”
The banks stand to lose at least $2.7 billion because loan prices have fallen since they agreed to finance the transaction last year. Citigroup Inc., Deutsche Bank AG, Credit Suisse Group, Morgan Stanley, Royal Bank of Scotland Group, and Wachovia Corp. promised to provide $22.1 billion in financing for the $39.20-ashare acquisition. Credit market turmoil has made it harder for buyout firms to complete deals.
