Clear Channel (CCU) won a round in court with its reluctant bankers. The San Antonio-based radio station operator said early Thursday that a Texas judge granted a temporary restraining order preventing Clear Channel’s bankers from backing away from its $19 billion buyout by Bain Capital and Thomas H. Lee Partners.

The banks, led by Citi (C) and Morgan Stanley (MS), have tried to change the terms of their financing but have been rebuffed by the buyers, The New York Times reported. The bank group agreed at the end of 2006 to fund the deal, but the industry has since fallen on hard times and major players are eager to conserve their capital amid a credit crunch. Complicating matters, the Times reports that the private-equity buyers were tipped off to the banks’ plans to renege on their financing agreements in a misfired e-mail last July. Now, Clear Channel says, “We are pleased that the Banks and the Purchasers will now be able to move quickly to complete the loan documents and fund the Merger.” That’s certainly looking at the bright side.

Oracle (ORCL) sank 8% in late trading Wednesday after the business-software company posted a mixed fiscal third-quarter profit report. Earnings rose 25% from a year ago to $1.34 billion, or 26 cents a share, matching the analyst estimate. But revenue rose just 21% from a year earlier to $5.35 billion, missing the $5.42 billion target. Of particular concern was a 7% rise in applications new license growth - which is a key line even though that business accounts for less than a tenth of Oracle’s quarterly revenue.

Still, some investors are inclined to shrug off Wednesday’s after-hours selloff, preferring to focus instead on the company’s success in folding in acquisitions and diversifying its revenue streams. “The overall story at Oracle is not about one thing,” says Damon Ficklin, a research analyst at Polen Capital Management in Boca Raton, Fla. Though he’ll be listening on Wednesday afternoon’s conference call for clues about Oracle’s organic growth - the pace revenue growth of excluding recent purchases, of which there have been many - Ficklin adds that for now, “the business looks rock solid.”

Financial stocks resumed their swoon Wednesday, led by a 5% drop in Citi (C) after Oppenheimer analyst Meredith Whitney cut her earnings estimates on the banking sector. The selloff shows that even after stocks staged a rally in the wake of Monday’s Bear Stearns (BSC) buyout sweetener, investors remain worried about the health of the economy and the ramifications of the credit crunch. While many observers are still puzzling over how we got into this mess, Steve Waldman at Interfluidity offers up a strikingly simple explanation in his Credit Crunch for Kindergarteners.

Chalk up another victory for Carl Icahn. Motorola (MOT) said Wednesday it would spin off its handset and broadband businesses to shareholders. The decision comes just two months after the activist investor urged the company to split itself in four and days after Icahn sued Motorola to force it to take action.

Motorola said it will search for a new chief executive to head up the handset unit, whose sales have collapsed since the once-popular Razr phone went out of style in 2006. The new chief will have his work cut out for him, given the handset business’ poor performance in recent quarters and the strong gains being chalked up by rivals such as Nokia (NOK) and iPhone maker Apple (AAPL).

“Our priorities have not changed with today’s announcement,” said Motorola chief Greg Brown in a statement. “We remain committed to improving the performance of our Mobile Devices business by delivering compelling products that meet the needs of customers and consumers around the world.” Motorola shares, which have lost half their value since Icahn started agitating early last year, rose 6% in early trading.

More bad news for the banks. Oppenheimer analyst Meredith Whitney cut her earnings estimates on big financial firms including Citi (C), citing rising write-offs of collateralized debt obligations and other mortgage-related debt. Whitney now expects Citi to post a 2008 loss after a first-quarter writedown of $13 billion. That’s not the biggest number out there - analysts at Merrill Lynch projected earlier this month that Citi could take first-quarter writedowns of as much as $18 billion - but coming from perhaps the most closely followed analyst on the banks, it’s a number worth noting.  

Citi isn’t the only outfit feeling Whitney’s wrath. She cut her estimates on JPMorgan Chase (JPM), Bank of America (BAC) and Wachovia (WB) as well. Whitney has been warning for almost six months now of serious pain in the banking system, starting with last October’s prediction that Citi would have to cut its dividend and raise capital. Those events came to pass two months later, but these companies still aren’t out of the woods, she writes Wednesday. “Despite cutting estimates for financials over 30 times since November, we are confident that this will not be our last reduction in 2008,” Whitney warned. ”We anticipate further downside to both estimates and stock prices.”

Hundred-dollar-a-barrel crude doesn’t necessarily lead to gushing profits, as oil refiner Valero (VLO) is showing. The San Antonio-based company warned late Monday that its first-quarter earnings will fall far short of Wall Street’s expectations, as margins on gasoline and other products narrowed and unplanned refinery outages hit the bottom line to the tune of $400 million. Valero expects to make just 10 to 35 cents a share for the quarter ending this month - down from $1.86 a share last year and below the 91-cent analyst estimate.  CEO Bill Klesse is scheduled to appear Wednesday afternoon at the Citi Refining Conference in New York to discuss the business’s fundamentals. With Valero shares falling early Tuesday and approaching a 52-week low, he may be fielding some tough questions.

Did JPMorgan Chase (JPM) overreach in its renegotiated purchase of Bear Stearns (BSC)? At the New York Times’ DealBook, Wayne State law professor Steven Davidoff writes that the new deal could face a tough challenge in the Delaware courts. Davidoff points to a provision that allows JPMorgan to buy 39.5% of Bear Stearns without shareholder approval - an arrangement that he believes the court may find coercive of Bear shareholders. “When (not if) it is challenged in a Delaware court, Bear will have to give a compelling justification for its 39.5% grant to JPMorgan,” Davidoff writes. “But at this point, given the JPMorgan guarantee and merger, can they do so?” With Bear investor Joe Lewis having promised to defend the value of his stock, we may soon find out.

Sirius (SIRI) spiked after the Justice Department cleared the satellite broadcaster’s plan to merge with rival XM Satellite (XMSR). The decision, which came over the opposition of the free-to-air radio companies represented by the National Association of Broadcasters, means the companies now need only to secure approval from the Federal Communications Commission. FCC chief Kevin Martin last week signaled his agency may well be leaning toward a conditional approval as well, when Reuters reported the FCC was working on drafts that included conditions upon which the deal could be approved.

An approval of the Sirius-XM merger would bring an end to more than a year of waiting since the companies proposed the deal back in February 2007. On Monday, Sirius rose 7% and XM surged as much as 16%, as once-skeptical investors flooded back into the shares. Even now, though, Wall Street continues to price the shares as if a deal might not happen: XM shares recently traded at $13.75 apiece, a discount of around 4% to the indicated value of Sirius’ all-stock offer.

Everyone seems to benefit from Monday’s renegotiated JPMorgan (JPM) purchase of Bear Stearns (BSC). Bear shares more than doubled, to $12.30 a share, after JPMorgan agreed to raise its all-stock bid for the cash-strapped brokerage firm to $10 a share from $2. There seems to be little reason to believe that the price will go even higher, given the provision in Monday’s deal that will allow JPMorgan to buy almost 40% of Bear even before a shareholder vote takes place. Accordingly, JPMorgan shares rose as well, as investors applauded the prospect that the deal can close soon - and that costly and time-consuming litigation can be avoided.

Meanwhile, U.S. taxpayers will benefit from a provision that reduces the Federal Reserve’s potential exposure to bad loans on Bear’s books. The New York Fed originally agreed to finance $30 billion worth of Bear’s assets without recourse, but the revised agreement has JPMorgan shouldering the first $1 billion of losses on that paper. Among other things, that arrangement should reduce criticism that the Fed is bailing out well-heeled investors at the expense of the public.

Likening the new structure to the deductible on an insurance policy, Jeff Miller points out at a Dash of Insight that the Fed’s motivation for arranging the Bear sale “was to avoid the systemic failure that might have started with Bear’s counterparties. The new deal terms accomplish this with a better alignment of risk and reward.” Seems like there’s not much to argue with there.