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Private-equity firms Thomas H. Lee Partners, Bain Capital Partners and Clear Channel Communications filed legal action Wednesday to force investment banks to stick to their original debt financing commitments for the planned $19 billion buyout of the radio giant.

The complaints against Citigroup, Morgan Stanley, Credit Suisse, the Royal Bank of Scotland, Deutsche Bank and Wachovia comes after the failure of negotiations, in which the banks tried to modify financing terms in the face of the global credit crunch.

"We have invested 18 months of time and effort to own Clear Channel," the private-equity firms said late Wednesday. "We want to do this deal. We are ready to close, have funded the equity portion of the purchase consideration, maintain our enthusiasm for the investment and are fully prepared to fulfill our contractual obligation to complete the deal."

They added that Clear Channel "must have an appropriate capital structure that allows management to operate the business effectively and seize growth opportunities in the marketplace."

The banks kept "unreasonably insisting on replacing long-term financing of at least six years with bridge financing of only three years, thereby preventing the close of the transaction," Clear Channel argued.

SMH Capital analyst David Miller downgraded the shares from "buy" to "sell," arguing that "downside risk in the stock is approximately $24.50."

Clear Channel shares hit a 52-week low of $25.90 intraday Wednesday before closing down 17.5% at $26.87.
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