Carlyle Group LP has agreed to pay about $115 million to settle a long-running proposed class action brought against it and several other private equity firms for allegedly teaming up to depress prices in leveraged buyouts leading up to the financial crisis. The settlement by Carlyle was with a potential class of shareholders of companies bought out by the private equity firms.
Washington, D.C.-based Carlyle’s settlement, worth approximately $115 million, comes just after its competitors KKR & Co. Inc., The Blackstone Group LP and TPG Capital LP agreed to pay a combined $325 million, the biggest settlement yet in the case. That settlement followed three others by Goldman Sachs Group Inc., Bain Capital LLC and Silver Lake Partners LP in which they paid $67 million, $54 million and $29.5 million, respectively, which left Carlyle as the only defendant remaining in the case.
The complaint alleges numerous separate deals between 2003 and 2009, in which the firms allegedly followed an elaborate set of bidding rules to artificially deflate prices, costing shareholders substantially in the target companies. Among the buyouts highlighted in the suit are a $21 billion deal for hospital chain HCA Holdings Inc. and a $5.1 billion purchase of high-end retailer Neiman Marcus Group Ltd. Another six related transactions were also mentioned. The Plaintiffs claim damages from the purported collusion, which is said to amount to billions.
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