As it continues to battle in court with six big banks, Clear Channel Comm. has again extended its bond tender offers, which can only close once the banks come up with the cash to close the 26.7 billion bucks buyout. The new deadline is May 2nd. Meanwhile, there’s still no word from the Texas Supreme Court, which is good news for Clear Channel and bad news for the banks.
The banks had asked the Texas Supreme Court to rule on their emergency motion seeking to put on hold the lawsuit by Clear Channel seeking $26 billion plus from them by Tuesday. Well, Tuesday came and went without any action on the motion, and Wednesday as well. So, as it stands, trial is still set to begin June 2nd, allowing it to be wrapped up before the pending buyout’s June 12th drop dead date.
The courtroom maneuvering moves to New York today, where a state court judge is holding a hearing on motions in the case. One of those is an attempt by Clear Channel to stay out of the New York proceedings. While the financing agreement between the banks and the two venture capital companies involved in the buyout specified that any legal action would be in the New York courts, Clear Channel was not a signatory to that agreement and says it has no reason to be involved in the New York case. It wants to keep pursuing its case in its home state of Texas.
RBR/TVBR observation: So long as Clear Channel keeps its Texas case on track and avoids any ruling dragging it into the New York or federal courts, it can keep applying the screws to the banks to fork over the 22 billion in financing and write off about 10% of it right away on their books, rather than risk a possible judgment of 26 billion. The law blog following Clear Channel development on the Wall Street Journal website said the banks were near a settlement last week when talks fell apart and the banks issued their call for arbitration, which was quickly rejected by the buyout firms. That was about what we figured, since the arbitration plea appeared to be an act of desperation.