You gotta be kidding me...what ever happened to our "Free Markets'? LONDON (MarketWatch) -- A Texas district court judge ordered banks to fund the proposed $19 billion buyout of Clear Channel Communications by two private-equity firms, the radio broadcaster said Thursday Fed and crew screwing around with BSC/JPM...I thought that was totally nuts, and now this? Geez. http://www.marketwatch.com/news/sto...75EDC-C0D1-4E4D-B3AD-D738CFE14EFC}&siteid=bnb Don
I don't read it as having broken a contract. or refusing to act in good faith in the drafting of definitive loan documents," the statement added... Just weird. Don
It is absolutely amazing what has happened over the past week. I hope for the fed that there are no scares anymore like a lehman, cit, etc. They have set a precedent that they can't live up to.
These banks are so full of it. They sign contracts saying they will provide financing even if debt markets deteriorate, then they want to reneg because they will lose money. Sorry about your loss dude-deal goes through. America shouldn't throw all its laws and contracts in the garbage to help a few banks' balance sheets.
There is a basic legal principle that a judge should not order "specific performance", ie perform the contract, unless money damages somehow will not be an adequate remedy for breach. The classic example is breach of a contract to convey real property, which is assumed in law to be unique. Here I would assume the banks can argue persuasively that Clear Channel can be made whole in a suit for damages. CCU no doubt argued that because of market issues,etc if the deal wasn't funded now it would never get done and that would impose irreparable harm on them which money damages could not adequately cover. Without knowing much more about it, it sounds like the court abused its discretion and the ruling will likely be overturned on appeal.