Goldman Sachs & Bain Capital in Settlement Worth $121M - Analyst Blog

An image of a compass on a chart
Credit: Shutterstock photo

On Wednesday, The Goldman Sachs Group, Inc. ( GS ) and Bain Capital Partners announced a settlement of a lawsuit, which accused the defendants of pulling down the prices of leveraged buyouts (LBOs) through collusion before the financial crisis. Goldman will pay $67 million, while Bain Capital will pay $54 million.

The lawsuit, which was filed by former shareholders of the acquired companies in Dec 2007, alleged private-equity firms of bid rigging to reduce competition for takeovers between 2003 and 2007 and deprived investors of billions of dollars. Notably, the case, which was filed in the U.S. District Court, District of Massachusetts comprised eight LBOs worth more than $100 billion. However, the settlement awaits U.S. District Judge William Young's approval.

Apart from Goldman and Bain Capital, other major U.S. private equity firms as defendants in the case include The Blackstone Group L.P. ( BX ), The Carlyle Group LP ( CG ), Kohlberg Kravis Roberts & Co. ( KKR ), Silver Lake Technology Management L.L.C. and TPG Capital Management. These firms will face a trial on Nov 3.

Though Goldman and Bain Capital have agreed to settle they have not admitted to any wrongdoings. They claim such settlements would benefit investors in the form of lower litigation costs, which have been on upswing. However, the lawyer on the plaintiffs' side takes the settlement as a positive for the case proceedings and looks forward to the trial to be held in November with other defendants.

Our Viewpoint

Trouble has been brewing for the banks for quite some time now, with the major banks facing a slew of lawsuits since the financial meltdown. Such lawsuits, alleging banks of wrongdoings, tarnish their reputation and financials over time. With the settlement of the lawsuits, banks plan to move forward with their business strategies, after attempting to end issues related to the financial crisis.

Therefore, it is in the interest of the company to resolve such matters at the earliest. However, investors and other financial institutions bearing the brunt of the faulty practices are expected to be fairly compensated.

Goldman currently carries a Zacks Rank #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

BLACKSTONE GRP (BX): Free Stock Analysis Report

GOLDMAN SACHS (GS): Free Stock Analysis Report

KKR & CO LP (KKR): Free Stock Analysis Report

CARLYLE GROUP (CG): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More