Boston, MA 06/13/2014 (wallstreetpr) – Goldman Sachs Group Inc (NYSE:GS) and Bain Capital, LLC reported settling a lawsuit which alleged the two of decreasing the prices of leveraged buyouts through conspiracy before the financial crisis. The agreement demands Goldman to pay $67 million in compensation, while Bain Capital Partners needs to pay a compensation of $54 million.
Allegations
Litigation was filed in the U.S. district Court in Boston against Goldman and Bain Capital on accusations that the two had conspired to pull down prices paid to targets in a number of large leveraged buyouts which were signed between 2003 and 2007. The lawsuit was filed by the target companies’ former stakeholders in 2007 who claimed that private equity firms had colluded to fix bids so as to curb competition in the 2003 to 2007 acquisitions. The case consisted of 8 LBOs which valued at over $100 billion. The settlement is still due to receive the approval of U.S. District Judge William Young, the current judge looking into the matter and who took over the case from Judge Harrington after his retirement towards the end of the prior year.
Others Involved
The case, whose initial complaint targeted as many as 17 private equity funds and 27 buyouts, also included other private equity firms such as KKR & Co. L.P. (NYSE:KKR), The Carlyle Group LP (NASDAQ:CG), The Blackstone Group L.P. (NYSE:BP), TPG Capital, L.P. and Silver Lake Technology Management, L.L.C. The firms are due to face a hearing on November 3, 2014.
Neither Goldman Sachs Group Inc (NYSE:GS), nor Bain Capital has admitted wrongdoing although they have agreed to pay their respective settlement compensation amounts. They said that such settlements would be advantageous for investors as they would lower litigation expenses which have lately been too high. The settlement is believed to create more pressure on the others involved as it has raised expectations for a settlement from them as well.
