Carlyle Group LP, the last defendant in a suit alleging that leveraged buyout firms conspired not to outbid each other on takeovers, agreed to settle a seven-year suit that was a thorn in the side of the private-equity industry.
Carlyle will pay $115 million, according to a person with knowledge of the matter, who asked not be named because the matter is private. The decision follows moves by Blackstone Group LP (BX:US), KKR & Co. and TPG Capital collectively to settle the suit for more than $300 million earlier this month. The firms had potentially faced up to $36 billion in liabilities when triple damages were included for allegedly colluding to rig prices of take-private transactions for at least eight deals.
Randall Whitestone, a spokesman for Washington-based Carlyle, declined to comment. David Mitchell, the lead lawyer for the plaintiffs in the case with Robbins Geller Rudman & Dowd LLP in San Diego, didn’t return a call.
The 2007 complaint had originally listed 19 leveraged buyouts and eight related transactions, in which the private-equity firms were alleged to have shortchanged shareholders in the target companies by agreeing to suppress takeover bids. The plaintiffs included pension fund Police and Fire Retirement System of the City of Detroit and a Minnesota-based investor, Kirk Dahl.
Since the case was introduced, the defendants, including Carlyle, have repeatedly said the accusations are without merit. Tony James, Blackstone’s president said last month the case was “outrageous” and “malarkey.”
Silver Lake Management LLC, Goldman Sachs Group Inc.’s private-equity unit and Bain Capital Partners LLC settled in the range of $29.5 million to $67 million earlier this year. A federal judge dismissed suits against defendants including Apollo Global Management LLC (APO:US) and Providence Equity Partners Inc. over the past two years.
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