The order by Bexar County Judge John D. Gabriel was issued just hours after Clear Channel and the private equity buyers, led by Bain Capital and Thomas H. Lee Partners LLC, filed suit in Texas and New York to force the banks to lend money promised in the deal first proposed 18 months ago.
They accused the banks of putting unreasonable terms on the loan in an effort to bust the deal, violating the commitments they made earlier.
If the deal closes, the banks could take $3 billion to $4 billion in writedowns. They are likely to have trouble reselling the debt in a credit market that has seized up.
The Texas judge found there was evidence Clear Channel and the equity firms will prevail in their case, and "harm is imminent and immediate," justifying the restraining order.
San Antonio-based Clear Channel, which is also a major billboard operator, hoped to complete the deal by Monday. Further delays trigger fees or potentially destroy the buyout altogether.
