Today’s the day. Six big banks are due in a San Antonio courtroom to face Judge John Gabriel, who has already issued a temporary restraining order telling the banks they can’t interfere with closing of the 26.7 billion bucks buyout of Clear Channel Communications by CC Media Holdings, a company primarily owned by Thomas H. Lee Partners and Bain Capital. Since the role of the banks in that deal was to provide more than 22 billion in financing, that order not to “interfere” essentially requires them to pony up the cash. At today’s hearing, Clear Channel is asking Judge Gabriel to make that temporary order a permanent injunction.
For their part, the banks are asking the judge to dismiss the case. Absent that, they are seeking a ruling that their potential damages are limited to 600 million, not the 26 billion-plus that Clear Channel is seeking.
RBR/TVBR observation: Clear Channel’s legal team has been having a great season thus far, winning the temporary restraining order and then blocking the attempt by the banks to move the case to federal court. If the permanent injunction is granted today and the banks’ motions denied, the banks will be under heavy pressure to settle and avoid the possibility of a mega-bucks judgment.
Among those sure to be anxiously awaiting the outcome are Jerry Kersting, Marc Chase and Steve Gable, who recently left Clear Channel for senior executive posts at Tribune Company. We understand that they will still get the full 39.20 per share for their CCU stock and options if the deal goes to closing within 60 days of their departure. Tribune, however, did not agree to make them whole for jumping ship. By the way, we also hear that Randy Michaels is not yet finished with his talent raid on his former employer.