An explosive lawsuit accusing the country’s biggest private-equity firms of conspiring to drive down prices on deals is moving forward after surviving its biggest legal challenge yet.
The New York Post reports that a federal judge in Boston denied a motion to dismiss the antitrust case - which accuses 10 buyout firms of costing shareholders billions by keeping prices artificially low - while narrowing the scope of the claims.
The PE firms, including Apollo Global Management, Bain Capital, Blackstone Group, Carlyle, KKR and a unit of Goldman Sachs, have tried nearly a dozen times in four years to get the suit tossed.
In his ruling yesterday, Judge Edward Harrington said shareholders could pursue their claim that the firms agreed not to jump each other’s exclusive deals. The only defendant he released from the count was JPMorgan Chase.
He also allowed a separate count to proceed alleging that Bain, KKR and Merrill Lynch paid an artificially low price in the $32bn buyout of the HCA hospital chain in 2006.
Each count could result in billions of dollars in damages, according to sources on both sides of the case.
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image: © Steve Punter