Clear Channel Communications charges that the banks are just trying to delay the case and cause the pending buyout to fall apart.
“Defendants have made clear that they are determined, by any means possible, to destroy the Merger and thus avoid their obligation to fund CC Media’s acquisition as they are required to do. Defendants have put forth great effort to deprive Plaintiffs of their vested contractual rights under the Merger Agreement, which the Defendants know must close no later than June 12, 2008,” Clear Channel said in its filing with the federal court. It charged that by trying to move the case to federal court, the banks are trying to avoid the Texas court hearing set for April 8th and to draw out the legal battle so that the deal will collapse before any court has an opportunity to rule on the merits.
RBR/TVBR observation: As you’d expect for a legal battle involving 26 billion bucks, the jurisdictional battle is complicated. The banks claim that since Thomas H. Lee Partners and Bain Capital are bound by agreements electing New York state courts to settle disputes, CC Media, the company by which they are to buy Clear Channel, is also bound. Poppycock, say Clear Channel and CC Media. CC Media itself is not bound by those agreements and it chose to join Clear Channel in the Texas lawsuit, where a judge has already ordered the banks not to interfere with the closing and set a hearing for April 8th. TH Lee and Bain, but not CC Media, have filed a separate lawsuit against the banks in New York. The banks claim the whole thing creates multiple state jurisdictions and the dispute should move to federal court. Clear Channel and CC Media say there is no dispute over jurisdiction and the federal court should steer clear and kick the case back to Texas. We await a ruling.