A Massachusetts federal judge has granted final approval to $590 million in settlements and $200 million in attorneys’ feed in a class action claiming Goldman Sachs Group Inc., Carlyle Group LP and other private equity firms teamed up to keep leveraged buyout prices low. U.S. District Judge William G. Young granted final approval to a series of settlements the firms had reached in recent months with the Plaintiffs in the antitrust class action. This brings the case to a close just a month prior to the seven-year anniversary of the filing of the initial complaint. Judge Young also approved a petition for $200 million in attorneys’ fees, despite objections that that number — more than one-third of the total settlement fund — was too high.
The decision comes three months after Carlyle became the last defendant to resolve the suit with a $115 million settlement to stave off a November trial in the case, which was brought by shareholders of companies the firms allegedly had underpaid by agreeing not to compete with one another for several major leveraged buyouts. The case had its way through federal court in Boston since late 2007 and remained largely under wraps until it was unsealed in late 2012. The complaint pinpoints a number of separate deals between 2003 and 2009 in which private firms allegedly followed an elaborate set of bidding rules to artificially deflate prices, shortchanging shareholders in the target companies.
Among the buyouts highlighted in the suit were a $21 billion deal for hospital chain HCA Holdings Inc. and a $5.1 billion deal for high-end retailer Neiman Marcus Group. Carlyle agreed in August to pay $115 million to settle claims that it and several other private equity firms had teamed up to depress prices in leveraged buyouts leading up to the financial crisis. It agreed to settle after the five other private equity firms on the case agreed to settlements of their own. That left Carlyle as the sole defendant in the case. Goldman and Bain Capital Partners LLC were the first to reach a settlement with the Plaintiffs in June, agreeing to pay $67 million and $54 million, respectively, to exit the case. Silver Lake Partners LP followed suit in July with a $29.5 million settlement. In early August, KKR & Co. Inc., Blackstone Group LP and TPG Capital LP also agreed to pay a total of $325 million in settlements.
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