Clear Channel suing banks over $19.5 billion purchase deal
In lawsuits filed in Texas and New York, Clear Channel and the buyers group, led by Bain Capital and Thomas H. Lee Partners LLC, claimed the six banks that promised to finance the deal were reneging on the agreement to provide long-term financing, looking to offer little more than a short-term bridge loan.
The lenders, which include Citigroup Inc., Morgan Stanley, Credit Suisse Group, The Royal Bank of Scotland, Deutsche Bank AG and Wachovia Corp., signed commitments when the deal was inked 18 months ago saying they would bear all the risk in changes to the debt market climate.
In that time, the credit market has seized up, making it much more difficult for the banks to resell the loans, so instead of sticking with the minimum six years of financing, the lenders had sought to provide only a short-term three-year loan, the equity firms said.
The banks issued a statement denying they failed to make good on their earlier commitment. "We believe the suits are without merit and will contest them vigorously," the statement said.
Clear Channel is the nation's largest operator of radio stations. The company owns seven radio stations in Utah: FM stations KODJ (94.1), KZHT (97.1), KJMY (99.5), KXRV (105.7) and KOSY (106.7), and AM stations KNRS (570) and KALL (700).
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