Early today, Clear Channel (NYSE: CCU) claimed that it had won a major legal battle in its efforts to get banks to fund a private equity buyout of the broadcast company. According to Reuters: "Clear Channel said Judge John Gabriel of the Bexar County district court in Texas found on Wednesday night that the company would suffer irreparable harm if the banks refused to fund the merger."
Citigroup (NYSE: C) and six other banks were to fund the $22 billion takeover by Bain Capital and Thomas H Lee.
The banks, looking at their balance sheets and a recession hitting the media industry, decided to walk. Financial companies have LBO debt on their books and are not able to sell it to other institutions because of the credit crunch.
The legal news is nice for Clear Channel, but the banks are not going to accept a ruling from Bexar County. The dispute has a long way to go.
Douglas A. McIntyre is an editor at 247wallst.com.
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