Banks, Private Equity Fight It Out Over Clear Channel

04.25.2008

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An early May trial date may be delayed in the Clear Channel buyout mess.

Reuters reports a New York state judge “made no immediate ruling” on the banks’ request to dismiss a lawsuit seeking to force them to fund the buyout.

Two private equity firms sued Citigroup, Morgan Stanley, Credit Suisse Group, Royal Bank of Scotland Group, Deutsche Bank and Wachovia Corp . to force them to fund the buyout.

The banks say they are not yet in breach of contract according to the commitment they signed with the private equity firms. A lawyer for the latter says the bankers “cooked up a set of loan documents that are nuclear, draconian and punitive” in an attempt to void the contract, according to Reuters.