Goldman Sachs, Bain settle suit on buyout collusion

Goldman Sachs and Bain Capital agreed to pay a combined $121 million to settle a private US lawsuit alleging collusion with other firms to suppress the price of takeovers.

Under the terms of the settlement, which must be approved by a federal judge, Goldman will pay $67 million and Bain $54 million to settle the claims in the multi-party lawsuit, according to documents filed Wednesday by the two sides in the litigation.

The case, originally filed in 2007 by a group of investors against 13 private-equity and financial heavyweights, accused them of working together to "rig bids, restrict the supply of private equity financing, fix transaction prices" and divide up the market.

According to the original case filing, seven leveraged-buyout transactions were affected by the alleged collusion, including deals for pipeline company Kinder Morgan and high-end department store chain Neiman Marcus.

Thomas Undlin, a co-lead counsel for plaintiffs at Robins, Kaplan, Miller & Ciresi, said cases against some of the original defendants were dismissed by courts.

With Bain and Goldman settling, the remaining defendants are: Blackstone Group, Kohlberg Kravis Roberts & Company, Texas Pacific Group, Silver Lake Partners and Carlyle Group. A trial is scheduled for November in Boston.

Neither Bain nor Goldman accepted fault or wrongdoing in the settlement.