Banks kept from reneging on Clear Channel’s sale
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SAN ANTONIO — A Texas judge issued a restraining order that in effect bars the banks that promised to finance the $19.5-billion buyout of Clear Channel Communications Inc. from backing out yet.
Bexar County Judge John D. Gabriel issued a temporary restraining order just four hours after Clear Channel and the private equity buyers, led by Bain Capital and Thomas H. Lee Partners, sued Wednesday in Texas and New York.
The firms said the lenders were trying to avoid honoring the financing commitment they made 18 months ago by turning a long-term loan into a short-term one with restrictions.
The judge found there was enough evidence that the plaintiffs could prevail and would be irrevocably harmed unless he issued an immediate restraining order.
He barred the six banks from “engaging in any other conduct that would operate to modify, compromise, jeopardize, sabotage, undermine, nullify, void, eliminate, hinder or obstruct consummation of the merger agreement.”
The banks -- Citigroup Inc., Morgan Stanley, Credit Suisse Group, Royal Bank of Scotland, Deutsche Bank and Wachovia Corp. -- declined to comment on the order through a Citigroup spokeswoman Thursday.
Gabriel ordered a hearing on an expedited trial April 8.
Clear Channel’s stock was hit hard Wednesday but partially rebounded Thursday -- up $2.68, or 10%, to $29.60.
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