D Peter Maus wrote:
clifto wrote:
D Peter Maus wrote:
CLEAR CHANNEL has agreed to be purchased by THOMAS H. LEE PARTNERS and
BAIN CAPITAL. But lenders including CITIGROUP, MORGAN STANLEY, DEUTSCHE
BANK, CREDIT SUISSE, ROYAL BANK OF SCOTLAND and WACHOVIA have declined
to provide the financing that they once said they would issue.

Sounds more to me like the banks unilaterally and arbitrarily decided to pull
out of an ironclad contractual commitment they made, and the court told them
to live up to their contract.

I'm wondering how ironclad that is. This deal has been in negotiation
for a while, and market conditions, stock values of the company, and
earnings projections have all changed. The conditions under which the
letter of commitment were made no longer exist.

Somewhere in the reading material (which I'm having trouble finding now)
there was a part where the contracted parties all acknowledged the changing
nature of financial markets and the risk of entering into a contract early
before the full impact could be determined. So basically the parties all
said they didn't care if conditions changed.

There it is, the last paragraph of what you posted:

"It seems clear that lenders' remorse set in when credit markets
worsened," BAIN and THOMAS H. LEE said in a statement WEDNESDAY. "Now
they are trying to walk away from their commitment letter which clearly
states that they bear all the risk that conditions in the debt markets
might change."

There's the part I was referring to. The banks made the commitment that
"they bear all the risk that conditions in the debt markets might change."

I can't see the courts forcing the banks into a deal they know is a
bad deal, especially when the banks are expected to shoulder all the risk.

If the banks explicitly consented to shoulder all the risk, no matter what
it might turn out to be, AFAIAC they're stuck. And it appears the banks
did just that.

Myself, I think they're stupid for saying "things change, we don't care"
and not protecting themselves.

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