Six banks today filed a motion in Texas state court asking that a lawsuit over the buyout of Clear Channel Communications Inc. be moved to federal court.
A Texas state court judge granted Clear Channel a temporary restraining order Wednesday night that orders the six banks to fund the buyout transaction on terms originally negotiated. The order will be in force until an April 8 hearing.
Clear Channel and the two private equity firms attempting to buy the company Bain Capital Partners and Thomas H. Lee Partners sued the banks to force them to provide debt financing to complete the $19.5 billion buyout.
The banks are Citigroup, Morgan Stanley, Credit Suisse, The Royal Bank of Scotland, Deutsche Bank and Wachovia. The suits, filed Wednesday in state courts in New York and Texas, allege the banks tried to derail the buyout by unreasonably insisting on replacing the long-term debt of at least six years with a three-year bridge loan.