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Lawyers Seek $195M in Fees in LBO Collusion Settlement

September 26, 2014 | Posted in : Contingency Fees / POF, Expenses / Costs, Fee Request

A recent Reuters story, “Lawyers Seek Fees of $195 mln for LBO Collusion Settlement,” reports that lawyers won a $590.5 million settlement against seven private equity firms, accusing them of conspiring to depress the prices of corporate buyouts before the financial crisis, are seeking attorney fees of $195 million for their work.  According to the court filings on Friday, the three law firms that led the nearly seven years of litigation are requesting fees equal to 33 percent of the settlement fund, plus as much as $15 million to cover litigation expenses.

The law firms are Robbins Rudman & Dowd; Scott & Scott, and Robins Kaplan Miller & Ciresi.  Both the settlement and the fee request require court approval.  U.S. District Judge William Young in Boston will consider preliminary approval of the settlement at a Sept. 29 hearing.

The December 2007 lawsuit was brought on behalf of shareholders in companies that were taken private.  It accused the private equity firms of conspiring to reduce compensation, refrain from bidding on each other’s buyouts and not trying to outbid each other after buyouts were announced.

The seven firms that settled were Bain Capital LLC, Blackstone Group LP, Carlyle Group LP, a Goldman Sachs Inc. affiliate, KKR & Co., Silver Lake Partners LP and TPG Capital LP.  Twenty-seven buyouts were originally part of the case, but only eight figured into the settlements: AMC Entertainment Inc., Aramark Corp., Freescale Semiconductor Inc., Harrah’s Entertainment Inc., HCA Inc., Kinder Morgan Inc., SunGard Data Systems Inc. and TXU Corp.  Some of the companies have since again become public.

The case is Dahl et al v. Bain Capital Partners LLC et al, U.S. District Court, District of Massachusetts, No 07-12388.