In Dahl v. Bain Capital Partners, LLC., former shareholders of companies purchased through leveraged buyouts alleged a per se violation on the part of Carlyle Group, Goldman Sachs, Blackstone and others by conspiring to fix the prices paid in leveraged buyouts. The defendants were accused of conspiring to suppress takeover prices by establishing “club rules” which kept the firms from outbidding each other once buyouts were made public. 937 F. Supp. 2d 119, 124 (D. Mass. 2013)(“Plaintiffs contend that defendants understood that, by working together, they could suppress competition and avoid another price escalation.”). The Carlyle Group was the last defendant to settle this class action–for a reported $115 million. In August, Blackstone Group LP, KKR & Co LP and TPG Capital LP disclosed in a court filing they agreed to pay $325 million to settle the lawsuit. Prior to that, Silver Lake Partners LP settled with the plaintiffs for $29.5 million. Goldman Sachs and Bain Capital Partners LLC settled for $67 million and $54 million, respectively (here). The firms faced up to $36 billion in liabilities if potential damages were trebled under the Sherman Act.
The case helps re-learn some lessons about cooperation among buyers: it can be a per se violation; legitimate joint ventures can easily slide into buyer collusion, experienced antitrust counseling pays, and private plaintiffs negotiate much like the DOJ. [Read more…]