Published On: Sun, Aug 10th, 2014

3 Private Equity Firms Accused of Crooked Practices to Pay $325 Million in Settlement

2008-9 financial crisis

KKR & Co. Inc., Blackstone Group LP and TPG Capital LP agreed to pay $325 million to do away with allegations that the three of them, as well as other major private equity outfits, conspired to bring down prices in leveraged buyouts before the 2008-9 financial crisis, according to a federal court filing Thursday, Law360.com reported.

The settlement says the three groups reached an agreement on July 28 to pay an aggregate $325 million, but not how much which of them will pay.

“Despite their beliefs that they are not liable for the claims asserted and that they have good defenses thereto, they have nevertheless agreed to enter into this agreement to avoid further expense, inconvenience, and the distraction of burdensome and protracted litigation, ” the settlement said.

Also to avoid prison, which we’re told is a huge inconvenience for billionaires.

Now only Carlyle Group LP is still being accused of what amounts to big business racketeering, and last week it declared it had no intention intend to settle.

In fact, last week Carlyle filed a motion for summary judgment, because the plaintiffs — a proposed class of shareholders of companies bought out by the private equity firms — can’t prove injury.

Accordint to Law360.com, previous settlements, with Goldman Sachs Group Inc., Bain Capital LLC, and Silver Lake Partners LP, netted $67 million, $54 million and $29.5 million, respectively.

The complaint deals with 19 separate deals, from 2003 to 2009, where the accused firms allegedly collaborated to artificially bring down prices, shortchanging the shareholders of their target companies.

One of those was the buyout for $21 billion of hospital chain HCA Holdings Inc. Another was the $5.1 billion acquisition of the high-end retailer Neiman Marcus Group.

The plaintiffs are saying they could have made a whole lot more on those sales, if not for the crooked practices of the defendants.

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