Court documents say US buyout firms rigged 'blockbuster deals'
October 13, 2012, 12:06 am TWN
NEW YORK -- Executives at some of America's largest private equity firms reportedly told each other that they wouldn't drive up prices for companies they were looking to buy, according to new court documents.
A complaint released Wednesday by a federal district court in Boston details email exchanges between executives at Bain Capital, Blackstone Group LP, and other private equity giants. It's part of a long-running lawsuit charging the firms with rigging bids for 19 buyouts during the wave of blockbuster deals before the financial crisis.
The plaintiffs in the class-action case are former shareholders in the companies bought by the private equity firms. Their lawsuit names nine of the largest private equity firms along with Goldman Sachs Group Inc. and JPMorgan Chase & Co. as defendants.
The plaintiffs say the firms colluded in some of the largest private-equity deals made between 2003 and 2007, such as buyouts for Neiman Marcus, Toys “R” Us and the hospital chain HCA, among others.
They argue that the firms joined together to suppress competition and lower prices.