Private Equity Firms Offer Big Money Settlement to Avoid Bid-Rigging Trial
A group of large private equity firms — including Apollo Global Management, Blackstone, Bain Capital, KKR, and Carlyle — have offered plaintiffs $200 million to settle bid-rigging claims before going to trial. The plaintiffs, who are former shareholders in a number of companies that have been acquired by these private equity firms, have rejected the offer according to the New York Post.
The next step is for the federal judge presiding over the case to determine whether it will be certified as a class action. If the judge does certify the case as a class action, the amount of potential damages will be significantly increased and the stakes much higher for the defendants.
These private equity firms, which made the settlement offer as a group, have been accused of teaming up on deals to buy out other companies — such as Toys ‘R’ Us, Univision, Sabre, Harrah’s, and Alltel — to avoid competition among the group and to suppress prices.
The defendants contend that there has been no bid rigging and that the plaintiffs’ claims make no sense. Only one thing is certain now: the defendants have not succeeded in buying their way out of a trial so far.
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