Goldman Sachs Group, Inc. (NYSE:GS) and Bain join for dismissal of bid-rigging Suit – CG, BX, KKR, JMP, APO

by Fiona Gabriel | Wednesday, Dec 19, 2012 | 510 views

Goldman Sachs Group, Inc.(NYSE:GS) and Bain Capital Partners LLC joined hands and requested a federal judge to dismiss an investor lawsuit condemning the largest investment banks and private-equity firms of colluding to rig bids on leveraged buyouts. The financial companies are among the 10 defendants who seek summary judgment from the U.S. According to the court; the papers were filed yesterday in Boston.

Goldman Sachs Group, Inc.(NYSE:GS), in its filings said that the petitioners haven’t proved that the banks and private- equity firms “participated in any conspiracy in violation of the antitrust laws.” The firms were sued in 2007 and 2008 by the companies who held shares in Individuals and a pension fund. The firms are accused in the investor lawsuit of forming “bidding clubs” that limited competitive offers and “artificially depressed prices.”
Firms’ Conspiracy

As per the petitioners, there was a conspiracy among private- equity firms as they plotted to rig bids. They have restricted the supply of private equity financing, fixed transaction prices and divided the market for leveraged buyouts,”

The defendants also include Carlyle Group LP(NASDAQ:CG), The Blackstone Group L.P.(NYSE:BX), KKR & Co. L.P.(NYSE:KKR), JPMorgan Chase & Co.(NYSE:JPM), Apollo Global Management LLC(NYSE:APO), Providence Equity Partners Inc., Thomas H. Lee Partners LP, Silver Lake Technology Management LLC and TPG Capital.
The defendant’s have quoted that the transactions represent legitimate business practices and the litigants have no right to sue for antitrust violations.

The jargon stating ‘Normal Working’
In October, revised complaint was uncapped, disclosing the e-mails among private-equity firm executives about potential buyouts. In an e-mail referring to a Free scale deal, Blackstone Group President Tony James told KKR co-founder Roberts, “Together we can be unstoppable but in opposition, we can cost each other a lot of money.” When questioned about it, they said: “I can’t walk out from those e-mails, but it’s still not a violation of antitrust law. These transactions simply represent the normal workings of the mergers-and-acquisition business.”
Free Scale Deal

Plaintiff Kirk Dahl said he and others in the proposed class of investors possessed shares in Freescale Semiconductor in 2006 when the chipmaker publicized a buyout by firms. Prices were at least 10 percent lower than they could have been, he said. “All the major pension funds were impacted, as well as thousands of individual shareholders.”
Houston’s Bush quoted “Given judicial hostility to antitrust laws, even what should seemingly be an easy case is sometimes lost,”

The shares of Goldman Sachs Group, Inc. (NYSE:GS) were up by 3.47% to close at $127.77
The shares of Carlyle Group LP (NASDAQ:CG) were up by 3.92% to close at $26.27
The shares of Blackstone Group L.P. (NYSE:BX) were up by 0.93% to close at $15.19.
The shares of KKR & Co. L.P. (NYSE:KKR) were up by 2.36% to close at $14.31
The shares of JPMorgan Chase & Co. (NYSE:JPM) were up by 0.90% to close at $43.87
The shares of Apollo Global Management LLC (NYSE:APO) were up by 1.56% to close at $16.92.

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