April 3 Clear Channel Outdoor Holdings Inc
agreed to settle a shareholder lawsuit seeking to
rescind an allegedly improper loan that the billboard
advertising company made to its ailing parent Clear Channel
The loan "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 in March last year.
Clear Channel Communications Inc and its owners, private
equity firms Bain Capital LLC and Thomas H Lee Partners LLC,
were also named as defendants.
As part of the agreement entered into on March 28, Clear
Channel Outdoor will demand payment of $200 million under the
revolving promissory note from its parent company, and pay a
special dividend of the same amount from the proceeds of the
Clear Channel Holdings Inc - the outdoor company's direct
parent and a subsidiary of Clear Channel Communications - would
receive 89 percent of such a dividend, to be paid out the day
the note is repaid.
Clear Channel Communications, which owns 89 percent of Clear
Channel Outdoor, was bought by Bain and Thomas H Lee in 2008 for
about $18 billion.
Clear Channel Outdoor's shares were flat at $7.38 in mid-day
trading on the New York Stock Exchange on Wednesday.