Clear Channel banks' request for delay denied
PHILADELPHIA (Reuters) - Clear Channel Communications Inc (CCU.N) said a Texas court on Monday dismissed a request by a group of banks to delay a trial over the funding of the $20 billion buyout of the radio station operator.
The banks on Monday asked to delay the June 2 trial until January, 2009, saying they needed more time to prepare, according to court documents obtained by Reuters.
The judge dismissed the banks' request, Clear Channel said in a statement late on Monday.
"We are thankful Judge (Lori) Massey wasted no time in rejecting the banks' latest attempt to postpone this trial," Clear Channel said in a statement.
"Hopefully the banks are running out of delay tactics, and they will soon face a Texas jury who will make them take responsibility for their actions," Clear Channel said.
The banks, which include Citigroup Inc (C.N), Morgan Stanley (MS.N), Credit Suisse Group (CSGN.VX), Royal Bank of Scotland Group Plc (RBS.L), Deutsche Bank AG (DBKGn.DE) and Wachovia Corp WB.N, could not be immediately reached for comment.
The private equity buyers -- Thomas H. Lee Partners and Bain Capital Partners -- have sued banks in Texas and New York courts -- seeking to force them to fund the deal. Clear Channel joined the Texas lawsuit, but is not a party in the New York case.
The banks were to provide more than $22 billion financing and earn more than $400 million in fees, but they balked when the debt markets deteriorated and asked for the terms of the deal to be changed, according to previous court documents.
In a filing on Monday with the District Court for Bexar County, Texas, the banks said the June 2 trial would not give them enough time to prepare since they must juggle the New York lawsuit as well, and they should not be rushed to trial in Texas.
The trial in the New York case is scheduled to begin May 5, although the judge in that case said last week that the date may get pushed back slightly due to scheduling conflicts.
The banks also said the Texas Supreme Court is currently weighing whether this case should be dismissed, so the trial should not begin until that decision is made, according to the banks' court filing on Monday.
"Forcing the parties to trial on June 2 would not gain (the) plaintiffs the benefit they seek -- a forced closing of the merger on June 12 -- but would certainly result in chaos and needless cost and inefficiency as the parties spend countless hours and resources attempting to comply with a draconian discovery schedule," the banks said in the court documents.
The banks also argued that certain factors of the New York case must be decided before the Texas case can begin and many of the legal questions in the cases are intertwined.
In the Texas case, Clear Channel and the private equity firms claimed the banks conducted "tortious interference" with the deal, according to earlier court documents.
In the New York case, the private equity firms are seeking to force the banks to comply with a commitment letter that details the plans to fund the deal.
On Monday, Clear Channel filed a response to the banks' motion to delay the Texas trial. Clear Channel said the Texas trial should not be delayed since the buyout agreement faces a deadline. The deal can be terminated if it has not closed by June 12.
"If the banks can 'run out the clock' on the termination date, they will argue that their own tortious interference was not the cause of the plaintiffs' damages," Clear Channel said in the filing.
"The banks should not be rewarded with a 'self-help' causation argument conjured from their own, deliberate efforts to delay (the) plaintiff's efforts to close their merger, or failing that, to have their day in court before their merger is utterly demolished," Clear Channel said in the court filing.
The buyout firms could not be immediately reached for comment.
(Editing by Kim Coghill)
