Carlyle Group, the last defendant remaining in a seven-year collusion suit, has settled for $115 million just months before going to trial.
The settlement would put an end to the lawsuit that claimed many of the industry’s leading firms had conspired to fix prices and limit competition in leveraged buyout deals before the financial crisis.
Carlyle was due to face trial in November. The firm has maintained its innocence, according to a source with knowledge of the situation, but felt a trial posed too great a risk. Damages and compensation could potentially have reached billions of dollars. It admitted no wrongdoing in the settlement, the same source said.
Carlyle declined to provide comment on the lawsuit’s resolution.
Shareholders, including a trust and a public retirement fund, filed the civil suit in 2007. It claimed illegal activity occurred in more than 19 “club deals” totaling $2.5 billion.
According to the original filings, the accused firms allegedly violated federal antitrust laws to “pay less than fair value for the target companies, which in turn deprived [their] shareholders of the true value of their shares upon sale of the target companies.” They also allegedly submitted sham bids and agreed not to “jump” each other’s deals.
“[These private equity firms had] participated in an unlawful conspiracy to raise, fix, maintain, or stabilize the price of large leveraged buyouts, announced between 2003 and 2007, to allocate deal outcomes and purchase target companies at artificially suppressed prices,” the lawsuit claimed.
Last month, KKR, Blackstone, and TPG settled for an aggregate $325 million while denying all wrongdoing. Bain Capital, Goldman Sachs, and Silver Lake also recently resolved the suit for $54 million, $67 million, and $29.5 million respectively.
With the addition of Carlyle’s payment, the total settlement amount came to almost $600 million.
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