A Texas state court denied a request by six banks to dismiss a lawsuit filed by Clear Channel Communications Inc and its two buyout firms who are trying to acquire the company.
Buyers Bain Capital and Thomas H. Lee Partners filed the lawsuit against Citigroup Inc., Morgan Stanley, Credit Suisse Group, Royal Bank of Scotland Group PLC, Deutsche Bank AG and Wachovia Corp., accusing them of fraud after the deal failed to close on March 27.
Clear Channel and the buyout firms said the banks violated its commitment to provide financing for the $19.5 billion deal.
Bexar County State District Judge Joe F. Brown Jr. set a June 2 trial date for the case.
We need relief, Clear Channel attorney Ricardo Cedillo said and called for a quick trial. We have 6,000 employees whose employment cannot be guaranteed. We have contracts around the world which have been thrown into uncertainty.
At Friday's hearing, the Texas court said the banks had improperly interfered with the closing of the sale.
We continue to believe the litigation brought by Clear Channel and the (buyout firms) is without merit and we look forward to arguing our case in court, the bank group said in a statement.
We are grateful the court saw through the banks' latest attempt to escape responsibility for the enormous damage they have caused our company, Clear Channel said in a statement.
The banks were in court in New York on Thursday where they asked for the case against them be dismissed. The banks insisted that they had not yet agreed to a number of issues related to funding.
Clear Channel joined the Texas suit, but was not a plaintiff named in the New York case.
Clear Channel shares closed up 55 cents or 1.9 percent to $29.45 on the New York Stock Exchange.