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Finance Firms Sue Banks over Clear Channel Deal
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Finance Firms Sue Banks over Clear Channel Deal

Business

STEVE INSKEEP, host:

NPR's business news starts with a financing feud on Wall Street.

It's another consequence of the credit crunch. Two giant finance firms are suing some of the biggest banks on Wall Street, including Citigroup and Morgan Stanley. Two private equity funds are trying to buy the nation's number one radio station operator, Clear Channel. This is a deal worth nearly $20 billion.

But the banks that agreed to finance the deal back in 2006 are now backing out. They don't want to put up the money because they're worried that they themselves will not be able to make money on the deal because of deteriorating credit markets. The two private equity firms are Bain Capital and Thomas H. Lee Partners, and they're accusing the banks of breach of contract.

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