Clear Channel may sue banks over buyout-Texas court

NEW YORK, April 16 (Reuters) - A Texas state appeals court on Wednesday rejected a request by several banks to dismiss a lawsuit by Clear Channel Communications Inc (CCU.N) and two private equity firms to force them to fund a $20 billion buyout of the largest U.S. radio station operator.

Last Friday, Bexar County Judge Joe Brown Jr had set a June 2 trial to determine whether Thomas H Lee Partners and Bain Capital could obtain the funding needed for the buyout.

Clear Channel and the buyout firms claimed that the banks, led by Citigroup Inc (C.N), had balked at providing financing after credit markets deteriorated last year.

The banks sought to have the case dismissed. But in a brief order, a three-justice panel of the Texas Fourth Circuit Court of Appeals in San Antonio concluded that the banks were not entitled to the relief they sought. (Reporting by Jonathan Stempel and Megan Davies; editing by Phil Berlowitz)