Friday, April 11, 2008

Radio: Clear Channel hops to it

Kangaroos are not indigenous to San Antonio.

But Kangaroo Courts are.

And Mark Mays has his troop of kangaroos all lined up.

On Friday, a Texas state court in Bexar County did exactly what we all knew it would do.
It hurriedly issued three rulings in favor of Clear Channel.

You were expecting what? Justice?

Kangaroo court justice denied the banks’ request to dismiss litigation against them in the dubious sale of this shell of a company to private equity carnivores BainCapital and Thomas H. Lee.

Betcha didn't you know that the kangaroo court was invented in Texas. The term was first used in the mid 1800’s in the Lone Star state to reference courts that sided with local claim jumpers.

What’s changed? Not much when your initials are C.C.

The kangaroo court decision gives Clear Channel rights to hop to and pursue charges that the six banks involved in the deal – (Citigroup, Morgan Stanley, Credit Suisse, Royal Bank of Scotland, Deutsche Bank, and Wachovia), wrongly interfered with its closing by backing out of their $19.5 billion financing commitment.

The court also granted Clear Channel and Bain/Lee’s extra bounce request for expedited trial scheduled for June 2.

What Stonehenge was to the Druids, Bexar Court is to Mark Mays.

The banks argue that they had not reached agreement on a number of financing issues when Clear Channel and Bain/Lee filed suit, which “exemplifies the reason why New York courts will not specifically enforce a contract to lend money," the filing read.
New York translation: How can you have a deal if there is no deal?

Bain/Lee seeks "specific performance" of a commitment letter that details the plans to fund the deal.

Specific performance means one party gets a judge to order the other party to stick to a contract.
Bexar translation: You have a deal even if you don’t have a deal.

Let’s hear what Clear Channel has to say about the decision.

“We are grateful the court saw through the banks' latest attempt to escape responsibility for the enormous damage they have caused our company. We look forward to taking this case to a Texas jury on June 2."
And what’s on the minds of the lending institutions involved? Step up to the mic, please.

“The Banks stand by their obligations under the Commitment Letter and now look forward to the opportunity to be heard in court. We were actively negotiating the many important open items in the credit agreements when the sponsors launched this litigation, constraining further discussions.”

While the banks and Clear Channel swapped statements, the shiver of lawyers involved gloated over the imminent billable hours.

That’s what lawyers love about the legal system. The more money you pony up, the more your rights get protected.

Now, here come the judge. Another one. Next Friday, there’ll be a hearing in San Antonio court before Judge Joe Francis Brown, Jr.

This one will deal with the tortuous interference of contract claim. The banks filed a motion to dismiss, arguing that Bain/Lee should be dismissed from the action under the forum selection clause in the debt commitment letter.

Since we’re dealing with a marsupial court, expect this Judge to schedule a preliminary injunction hearing or some reasonable facsimile just to screw with the New York court.
What part of a judge being required to exercise good judgment do you not understand?
I looked up “kangaroo court” in Wikipedia. It said, “Kangaroo courts are judicial proceedings that deny due process in the name of expediency.
The outcome of such a trial is essentially made in advance, usually for the purpose of providing a conviction, either by going through the motions of manipulated procedure or by allowing no defense at all.”

If it hops like a kangaroo, talks like a kangaroo, you can be reasonably sure it’s a kangaroo.
Murray Saul's first public appearance in thirty years


Anonymous said...

Given the locale and those involved, I would not have expected the court to rule in any other way.

Anonymous said...

Interesting note. Judge Joe Francis Brown, Jr. is the son of the judge that presided over the trial of Jack Ruby, who killed Lee Harvey Oswald, the assassin of President John F. Kennedy. He also wrote a book about it.

Leave it to the Mays family to be connected with a judge that is well versed on cover ups.

Current CC employee said...

This is from a New York Times article on yesterday's hearing:

"We need relief," Clear Channel attorney Ricardo Cedillo said, arguing 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."

WHAT???? Here is a company that treats its employees like illegal aliens working under the table. This is absoloute b.s. How many of those 6,000 will still have jobs when BainCapital and Thomas Lee takes over Clear Channel? Of those 6,000 what percentage of them receive benefits? Clear Channel successfully eliminated thousands of full time jobs to elimiante commitments to health and other benefits. The BEST thing that could happen is for this deal to fall apart and force Clear Channel to sell off their properties as a loss. As an employer Clear Channel is one of the worst and for them to claim compassion for their employees is nothing less than an insult to those under their employment past and present.

Anonymous said...

So if this trial was held in NYC, and the judge went in favor of the big NYC banks, would you be screaming? I bet not.

soon to be ex cc said...

No one has sympathy for the banks. I sure don't. No one has sympathy for Clear Channel. I sure don't. No one has sympathy for private equity groups that treat acquired company employees like ants. I sure don't. There is not a right side in this matter. The best possible solution in this matter is that the Clear Channel deal falls apart. It puts that miserable company on borrowed time. The banks will live to see another day since there is always a government to bail them out on our tax dollars. Bain and Lee have so many investments they can afford to have one go belly up and write it off against their profitable companies. The ones that get hit the hardest (if the banks get wiggle out of their back out fees) are the Clear Channel bastards especially the golden parachute club types most of whom have left the company for Tribune over the last few weeks and can still collect their parachute money if the deal goes through. My guess is that just about every Randy Michaels Clear Channel hire will be at Tribune shortly and that includes John Hogan and Tom Owens.

Anonymous said...

"The best possible solution in this matter is that the Clear Channel deal falls apart. It puts that miserable company on borrowed time."

Wishful thinking. It just means the Mays family continues to run it.

Maybe you haven't noticed, but CC owns some of the most profitable radio stations in the country. They're not hurting for money.

They'll just continue to sell off assets one by one and continue to fire people. That's what you're prolonging by keeping the status quo.

Clear Channel is a cash cow. They aren't close to going under. The US government is in far worse shape. It's great that a lot of the top people are leaving CC for Tribune. They're a lot of overpaid older people who'll be replaced by younger cheaper staffers. All of whom will have far better attitudes.

Radio Guy said...

>>My guess is that just about every Randy Michaels Clear Channel hire will be at Tribune shortly and that includes John Hogan and Tom Owens.<<

Randy is doing what Randy does. He is showing the same penchant for cronyism that he showed at CC. He was successful in radio at a relatively small company, Jacor, at a time when radio was booming. He has not shown that he can be successful in a big company when the wind is not at his back.

Anonymous said...

“We are grateful the court saw through the banks' latest attempt to escape responsibility for the enormous damage they have caused our company."

LOL! Mark Mays should have been looking in a mirror when he spouted off that line. If anyone has caused "enormous damage" to CC, it's him and his minions!

P. Mason said...

The lawyers will d-r-a-g this one out f-o-r-e-v-e-r.

P. Mason said...

The lawyers will d-r-a-g this one out f-o-r-e-v-e-r.

Bookworm said...

This is somewhat on the subject. The New York Times Book Review yesterday carried a favorable review of the Clear Channel book “The Rise of Clear Channel and the Fall of Commercial Radio” by Alec Foege. You mentioned this a few weeks back. I was wondering if and when Clear Channel plans to rush out their hired gun Reed Bunzel - written “Clear Vision: the Story of Clear Channel Communications” book. I think CC messed that one up. They should have had that out in front of Foege's book if they were planning to block publicity for it and also get a few more points in their favor in court last week. Maybe CC wanted to wait until Foege's book was out before releasing Bunzel's but it looks like that was a bad call. The CC -favored book will look exactly like the sham that it is. For all we know this may be a book published strictly for Wall Street and other decision makers and will be distributed free and never see the light of day in book stores. From what even the general public knows of Clear Channel no one would ever take Bunzel's book for anything other than propaganda. I have the Foege book on order at my book store. I cannot wait to read it. I also ordered the Bunzel book and it was not in their system yet. Vetty innnteresting! John, I liked your book, too. I am not from Cleveland and I can still relate to those days.

Anonymous said...

The banks are clearly at fault UNLESS - BIG UNLESS - Clear Channel misrepresented what they were selling. I hope their financial projects are introduced in court though a Mays influenced Kangaroo court may claim those figures are trade secrets. I would not be the least bit surprised. Knowing how Crook Channel operates I think we are going to see a lot of backroom dealing to pull this one off. Clear Channel may get their way and get the deal through. It will not save the company.

Anonymous said...

You are so right about Randy Michaels. He is a bully with his little gang of slime balls and big daddy Sammy Zell to protect him. He did not even run Jacor well. That company was down to nothing. Even their treasured Y100 in Nashville was dead after their stupid sex with a dog audio stunt. These guys should run strip clubs and adult book stores. It is more their style. Lee Abrams is a nice addition to their little clubhouse. He is another one who waddled through life fortunate to be able to afford publicists to revision his history. The Abrams I remember was so drunk he pissed his pants in the lobby of a hotel and later tried to kill himself by jumping into the ocean fully clothed. If anyone thinks this is some kind of "meeting of the minds" --forget it. Not going to happen. They will create an illusion of improving a company and Sam Zell will sell it to some sucker who will go belly up like the Mays family is taking Clear Channel. Same cast of characters that destroyed that company.

Anonymous said...

I am not sure how long anyone can drag their feet on this. Radio is hurting, the banks are hurting. The longer this goes unresolved the worse it will be for everyone concerned. There are no winners and there are no heroes in this endeavor. I think you said it best a while back, John: some things are not meant to be that big. Radio is one of them.

Anonymous said...

Aw too bad its not Judge Joe Brown the TV judge. Now he's cool. That would be a rock 'n soul trial. Better than having another hand puppet for Lowry and the boys.

Logical Song said...

I lean toward the banks being at fault. Don't misinterpret taking sides. I abhor the Mays family and Clear Channel. The fact remains that the banks did sign on the dotted line and backing out is buyer's remorse. They should not have been so greedy up front and had they done their due dilligence properly they would have spotted the red flags. The banks have to live up to their agreement and that decision would be made whether or not the court room is in San Antonio or New York. The Mays family was buying insurance by calling in the chits. Either way Clear Channel employees are going to get hurt and discarded. The outcome will be that Bain/Lee will chop the stations up regionally or market size wise and may end up selling them at a loss. They have enough profitable deals to write this one off against. I would like to see us get past this stage of the game so we can be one step closer to better ownership in the future.

Anonymous said...

I lost faith in our legal system when I went through a divorce and it went on until the lawyers knew they bled me dry. I see the same sceneario here. Lawyers are scum. Sorry if I offend anyone but after what I went through I think we would be better off returning to ten paces and shoot and hope there is a lawyer standing in the way.