Antitrust Law Daily Wrap Up, ANTITRUST—D. Mass.: Private equity firms settle price fixing, bid rigging suit , (Mar 6, 2015)

By Greg Hammond, J.D.

Final settlements and a supplemental allocation plan have been approved by the federal district court in Boston, in a class action where private equity firms supposedly rigged bids and restricted the supply of private equity financing, fixed transaction prices, and divided up the market for private equity services for leveraged buyouts (LBOs) (Dahl v. Bain Capital Partners, LLC, March 2, 2015, Young, W.).

Shareholders of various corporations filed a class action suit against, in part, Bain Capital Partners, LLC, Goldman Sachs Group, Inc., Blackstone Group L.P., Silver Lake Technology Management, LLC, and others, in December 2007, alleging horizontal price fixing and both per se and rule of reason violations of the Sherman Act based on a theory that the LBO firms used “bidding clubs” or “consortia” to wrest control of the LBO process for the public corporations. The plaintiffs asked the court to award damages for unjust enrichment, to mandate payment of restitution, and to impose a constructive trust. However, the parties subsequently settled, and the court granted preliminary approval of three proposed settlements in June, July, and August of 2014, for over $475.5 million.

In four separate orders entered on March 2, 2015, the court finally certified the class for settlement purposes, which includes: All persons or entities who sold or exchanged their common stock of (1) AMC Entertainment Inc.; (2) SunGard Data Systems Inc.; (3) Aramark Corp.; (4) Kinder Morgan, Inc.; (5) HCA Inc.; (6) Freescale Semiconductor, Inc.; (7) Harrah’s Entertainment, Inc.; or (8) TXU Corp., as part of the leveraged buyout (LBO) of any of the preceding target companies.

The court granted final approval of the settlements concerning (1) Silver Lake Technology Management, LLC; (2) Bain Capital Partners, LLC; (3) Goldman Sachs Group, Inc.; and (4) Blackstone Group L.P., Kohlberg Kravis Roberts & Co. L.P., and TPG Capital, L.P., finding that the terms of the settlement agreement were fair, reasonable, and adequate.

Lastly, the court entered an order approving supplemental plan of allocation of settlement proceeds, finding that the supplemental plan provides a fair and reasonable basis upon which to allocate the proceeds of the Net Settlement Funds established by the settlement agreements among settlement class members.

The case number is 1:07-cv-12388-WGY.

Attorneys: Christopher M. Burke (Scott & Scott LLP) for Kirk Dahl. Craig S. Primis (Kirkland & Ellis LLP) for Bain Capital Partners, LLC. Emily D. Kite (Willkie Farr & Gallagher LLP) for Silver Lake Technology Management. Abram J. Ellis (Simpson Thacher & Bartlett LLP) for The Blackstone Group LP. Austin F. McCullough (Sullivan & Cromwell LLP) for Goldman Sachs Group, Inc.

Companies: Bain Capital Partners, LLC; Silver Lake Technology Management; The Blackstone Group LP; Goldman Sachs Group, Inc.

Cases: Antitrust MassachusettsNews