With a $22 billion in financing at stake, a hearing over the disputed buyout of radio giant Clear Channel Communications drew a packed audience in lower Manhattan today.
Runners for hedge fund managers and law firms showed up early at the New York State Supreme Court for the afternoon hearing. One hedge fund representative who showed up was juggling two BlackBerrys and loudly complaining about the crowd turning into a "clusterfuck," ruining the time spent by his runner. (He got in nonetheless.)
While today's hearing produced some colorful internal bank emails -- including one that wished the recipient good luck in getting out of the deal, adding that "lot of bonuses were on the line" -- the case centers on a commitment letter the banks signed last May, just before the credit crunch hit.
The two private equity firms leading the Clear Channel buyout are trying to force the banks to close on the commitment letter. It is part of a two-prong legal attack on the banks. Another lawsuit, filed by Clear Channel in a Texas court, contends that the banks are liable for tortuous interference with the buyout agreement by not providing the financing.
The hearing today, before Justice Helen Freedman, was on a motion for summary judgment by the banks seeking to throw out the private equity firms' claims.
Guy Miller Stuve (rhymes with "groovy") of Davis Polk & Wardwell, argued for the banks, Citigroup, Morgan Stanley, Credit S ...
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