Carlyle settles collusion case

The Carlyle Group paid $115 million to settle a collusion case Friday, less than a week before it was due for a major hearing on the lawsuit in Boston.

District-based Carlyle was the last of several private equity firms to settle the seven-year-old case. Plaintiffs had alleged that Carlyle and the other firms had colluded, mostly through e-mail, not to bid against one another on takeover targets during the mid-2000s.

Carlyle declined to comment, and a person close to the negotiations said Carlyle settled the case without admitting any wrongdoing on its part.

Six private equity defendants had already agreed to pay $475 million to settle the collusion lawsuit. A group of plaintiffs, suing in federal court, accused Carlyle, Blackstone Group, TPG Capital, KKR and others of agreeing among themselves not to bid against one another in eight corporate takeovers that included theater chain AMC Entertainment, food service firm Aramark and casino operator Harrah’s Entertainment.

As the lone holdout, Carlyle had taken a high-risk, high-reward­ strategy. Carlyle faced a legal technicality, known in class action suits as “joint and several,” which makes the remaining single defendant liable for all the damages incurred by the alleged conspirators.

In this case, Carlyle would have been on the hook for $10 billion, which under law can be tripled to $30 billion — or three times the value of Carlyle’s entire firm.

— Thomas Heath

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