Clear Channel dispute escalates

Lawyers file suit over bank delay in deal

Pellicano trial slowly winding down

Jurors get an earful at Pellicano trial

Brad Grey speaks in Pellicano case

Doucett testifies at Pellicano trial

Judge rules on SAG tax distribution

Escalating the dispute between lenders and the private equity firms trying to take Clear Channel private, Thomas H. Lee Partners and Bain Capital Partners filed suit Wednesday over banks' reluctance to fund the nearly $20 billion deal.

Named in the complaints filed in New York and Texas are Deutsche Bank, Citigroup, RBS, Wachovia, Morgan Stanley and Credit Suisse.

Clear Channel itself joined as a plaintiff in the Texas suit.

Announced in November 2006, the takeover of the radio and billboard giant had previously run aground over shareholder protests about the price of $39.20 a share. By mid-2007, the subprime crisis had hampered the banks' efforts to secure the loans and finalize the deal, especially given how far Clear Channel stock had fallen.

Shares surrendered more than 17% Wednesday to $26.92, though they rebounded sharply after hours on news of the suits.

In a joint statement, Bain and THL charged, "Lenders' remorse set in when credit markets worsened. 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."

The financial services sector has been reeling of late amid $208 billion in collective credit losses and writedowns.

If the deal collapses, THL and Bain could end up paying a breakup fee of up to $600 million.