Professor Elam

A Texas District Judge has ordered a group of banks to fund the Clear Channel Buyout loan package.

Why is a judge involved? Well, the banks all backed out of the funding amid their unknown losses in the subprime mess. Here is the evidence that lending standards are being tightened but as they say,the barn door is being closed after the cows got out.

The result is that CCU stock has dropped dramatically in price from the $39 offer.  CCU owns many top radio stations and a group in San Antonio is trying to use leverage, ie debt to buy them. We are studying hte equity side of the balance sheet. Once again, are the ‘assets’ worth’ their value on the balance sheet. As of today the stock market is saying no.  Look for this case to be appealed. District Courts are the first level of courts in Texas for a case of this magnitude.