Well, that didn't take long.

Just days before the $19 billion buyout of Clear Channel Communications was scheduled to close, the private equity firms behind the deal have sued the banks it hired to provide the financing for it. 

Thomas H. Lee Partners and Bain Capital Partners filed suit in New York and Texas against Citigroup, Morgan Stanley, Credit Suisse, the Royal Bank of Scotland, Deutsche Bank, and Wachovia. The move is an attempt to enforce the commitments the banks allegedly made to provide the necessary debt-financing for them to acquire the chain of radio stations.

The firms say that the banks have attempted to renege on the commitments it made nearly a year ago. "It seems clear that lenders' remorse set in when credit markets worsened," the firms said in a statement. "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." 

Indeed, several reports earlier today suggested that the deal was dead after the banks balked at the financing. This is just the latest saga in the 18-month long battle to take Clear Channel private.

Given that the credit crunch has wrecked the market for debt since the deal was first announced in November 2006, a collapse—and subsequent litigation—has seemed likely. The banks stood to lose $2.7 billion on the day the deal closed.

But T.H.L. Partners and Bain appear to be unimpressed by the challenging credit market the banks currently face. They simply want to do the deal. "We have invested 18 months of time and effort to own Clear Channel. 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. But Clear Channel must have an appropriate capital structure that allows management to operate the business effectively and seize growth opportunities in the marketplace."

A collapse of the Clear Channel deal would be the latest big buyout to founder over financing, following the dashed buyouts of Sallie Mae and United Rentals.

Brian Maloney on the Radio Equalizer blog says, "For the already-beleaguered radio industry, this is not good news, as Clear Channel was the only major radio operator holding on to most of its market capitalization."

Who would have bet a year ago that the Clear Channel buyout would have failed while the Sirius-XM Satellite Radio merger would get approved?