J.C. Flowers and its pals are asking the Delaware Chancery Court to allow it to kill their $25 billion leveraged buyout of Sallie Mae ( SLM). In a 50-plus-page document filed this morning, the Flowers group -- including Bank of America ( BAC) and JPMorgan Chase ( JPM) -- filed a letter to Judge Leo E. Strine Jr., requesting that the deal be canned because the Reston, Va., student lender's business has suffered a material adverse effect. Flowers continues to assert that the merger cannot be closed at the originally proposed $60-a-share price because legislation signed into law by President Bush threatens to crimp Sallie's earnings. Disputing that claim, Sallie seeks to have the buyers close the deal at the agreed-upon terms -- or pay a $900 million termination fee. Officials at the parties declined to comment. "This is now a fight over $900 million, let's not pretend there's still a deal on the table," comments one official close to the buyout group. "Up until last Monday, we had hoped to be in conversation, but instead they just keep getting more and more hostile," the official adds. Legal salvos have been the order of business over the past several days. Sallie's stock, meanwhile, has been retreating steadily, with today's action seeing it fall in value by more than 3% to $46.81. During last week's third-quarter earnings call, Sallie Chairman Albert Lord explained away a latest-quarter $344 million loss by claiming the dispute is "costing us earnings momentum."