Clear Channel Q&A, the Legal Edition
We know, you’ve been waiting for this all day — everything you wanted to know about the legal backstory to the Clear Channel litigation but were afraid, or just too darned busy, to ask.
One suit was filed against a bunch of the i-banks, by Friedman Kaplan Seiler & Adelman in NYC, and
another just against Deutsche, by Kellogg, Huber, Hansen, Todd, Evans & Figel in D.C. Kellogg Huber, like Friedman Kaplan, is another 50-something lawyer firm, according to its Web site. It was tapped because Friedman Kaplan was conflicted out of suing Deutsche, according to a person familiar with the case. (Biz conflict, ethics rules conflict, we don’t know.)
The New York suits involve the private equity firms suing the banks. Jurisdiction over disputes concerning the commitment letter is New York. The Texas suit has Clear Channel as a plaintiff. It’s not a signor of the commitment letter and is based in Texas.
Not quite. Today, defendants in the Texas case sought to remove it to federal court. Here’s the Notice of Removal.
We’re still working on that, but Michael Carroll, Lawrence Portnoy and Brian Weinstein at Davis Polk are on the removal notice as representing the banks in the Texas action.
The Texas order can be found on this NYTimes Dealbook page in Addendum section:
http://dealbook.blogs.nytimes.com/2008/03/26/the-fog-of-war/
But they have no comments of interest at all, not even any “First” idiots, which I suppose is a reason to return there.
On what grounds could the banks possibly remove? There’s not complete diversity, and I don’t see a federal question unless I’m missing something (I do patent law).
Then again, when you’re a defendant, justice delayed is justice.
To Clear Channel Employee Turned Lawyer: As stated in the Notice of Removal, their argument is that CC Media was improperly joined (to defeat diversity) and that in its absence there would be complete diversity.
I hope this case is decided on the merits of “Did the Banks commit to fund the transaction?” not the “Clintonian …define commit”. Either their word is good or not. Probably the question should be, “If the deal were making them $2B and it fell apart, would they sue to make it stick?” Guess I’m just too practical.
If a D can remove and they don’t, that may be malpractice. They are well-served by running the clock (everyone knows it). The usual trick is to claim a DEFENDANT is improperly or fraudulently joined to defeat diversity. In this case Ds claim the PLAINTIFF was improperly joined because it (its sponsors) executed a K w/ a forum clause in NY. But 28 USC 1441 says:
“Any other such action shall be removable only if none of the parties in interest properly joined and served AS DEFENDANTS ia a citizen of the State in which such action is brought.” (emphasis added).
Don’t know enough about the parties, claims, or the K, but on the sueface this seems like a clever trick to run the clock and/or remove.
Citibank, in dire financial straits and already targeted once by short sellers, will use every stalling tactics available to delay a resolution to these cases. It is to the Citi’s advantage that there is a two forum legal war. Lead counsel for Clear Channel better rent a nice big house in San Antonio, and be prepared for a six month stay.
Non-Blackstone Dictionary Approved Appropos Phrases:
Legalistic mush.
Weasel out.
Squeezing a dry bank dryer.
Who knew?
Isn’t it supposed to be an obvious contingency lawyers are for ?
Bacuse Recessions Happen.
Buyouters are debt dependant junkies.
Buyouters can no longer be such debt dependent junqeys, can they?
Fulfills Marx-Engels bugaboo about the inevitable bankruptcy of speculation upon speculation.
Has anyone seen a copy of the actual commitment letter? I’d like to take a look.
Do we know yet which firms are representing the banks?
The Commitment Letter is here:
Thanks for the link; that’s a big help.
why is Paul Young still listed as “of counsel” on the Milberg Weiss website. Doesn’t Milberg Weiss know that El Mirage is tied to organized crime? See the new details at http://bitterqueen.typepad.com/history_of_gay_bars_in_ne/2007/12/current-gay-bar.html
Per the commitment Letters
“We are pleased to have been given the opportunity to assist you in connection with this important financing.”
Barbara Matas - Citigroup Global Markets
David Mayhew, - Deutsche Bank AG
Vikrant Sawhney - Deutsche Bank Securities
Henry F. D’Alessandro - Morgan Stanley Senior Funding, Inc.
Judith E. Smith - Credit Suisse Cayman Islands Branch
SoVenna Day-Goins - Credit Suisse Securities (USA) LLC
The Royal Bank of Scotland plc
Steven F. Killiles
Jamee D. Jefferies - Wachovia Bank
I hope these folks are never trusted to close another deal in their pathetic careers.
per: indemnification agreement
“provided that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they arise from the willful misconduct, bad faith or gross negligence of, or breach of this Commitment Letter or the Fee Letter by, such indemnified person…..”
Not to mention Herny D’Alessandro’s wife turns out to be a lesbian!
