March 8 The board of Clear Channel Outdoor
Holdings Inc was sued Thursday by an investor seeking to
rescind what it called an improper $656 million loan that the
billboard advertising company made to its ailing parent.
The loan has "so significantly" depleted Clear
Channel Outdoor's cash reserves that the company was forced to
borrow $2 billion to fund a special dividend, according to the
lawsuit filed in Delaware's Chancery Court.
Clear Channel Communications Inc, the radio broadcaster and
parent of Clear Channel Outdoor, was also named as a defendant.
Its owners, private equity firms Bain Capital LLC and Thomas H
Lee Partners LLC, were also named as defendants.
None was immediately available for comment.
Bain and Thomas H Lee bought Clear Channel Communications in
2008 for about $18 billion. Clear Channel Communications owns 89
percent of Clear Channel Outdoor.
According to the complaint by the City of Pinellas Park
Firefighters Pension Board, Clear Channel Outdoor's directors
were compelled by their ties to the parent and the private
equity firms to make the loan on "incredibly favorable" terms,
Late last year, a shareholder challenged the loan and asked
the board to review it, but the board said the loan could not be
modified or eliminated.
"Outdoor faces a severe risk that the unsecured loan will
never be paid back because (Clear Channel Communications) has
been drowning under a massive debt load since its 2008 leveraged
buyout," the lawsuit said.
Shares of Clear Channel Outdoor rose 23 cents on Thursday to
end at $13.73 on the New York Stock Exchange.