Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Summary Judgment Hearing in Leverage Buyout Collusion Case Set for Today and Tomorrow, (Dec 18, 2012)

By William Zale, J.D.

In an action by former shareholders in companies acquired through leveraged buyouts (LBOs), who claimed that private equity firms acquiring those companies had violated federal antitrust law by colluding to suppress competition for the transactions, a hearing on motions for summary judgment in the federal district in Boston was set for December 18 and 19. The former shareholders, in a class action complaint, assert that Bain Capital Partners, Goldman Sachs, Blackstone Group, Carlyle Group, KKR, JPMorgan Chase, and others engaged in a market allocation and bid-rigging conspiracy in violation of Section 1 of the Sherman Act.

The alleged conspiracy involves 19 LBOs of large publicly-held companies, and eight related transactions. To implement their conspiracy, the defendants allegedly agreed to certain rules and conduct, referred to as “club etiquette” and “professional courtesy,” according to the complaint. These rules allegedly governed how the defendants conducted large LBOs and related buyout transactions. By following these rules and acting contrary to their individual and unitary self-interests, the defendants suppressed price competition for large LBOs, according to the complaint.

The court held that the shareholders were not barred under the statute of limitations from amending their complaint to alter the class definition and add a claim relating to five additional transactions in a July 18 decision, Dahl v. Bain Capital Partners, 2012-2 Trade Cases ¶77,982. Earlier, the court had granted the shareholder’s a second round of discovery to expand the case beyond nine alleged LBO transactions (2010-2 Trade Cases ¶77,164, August 18, 2010).

The case is No. 1:07-cv-12388-EFH.

News: Antitrust