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Firm Memoranda

Dahl v. Bain Capital Partners, LLC: Court Denies Motion to Dismiss Antitrust Claims against Private Equity Firms

Date: 12/16/08

In Dahl v. Bain Capital Partners, LLC, (Civ. No. 07-12388-EFH (D. Mass. Dec. 15, 2008)) a federal district court in Boston denied defendants' motion to dismiss claims that private equity firms violated antitrust laws through the use of "club deals" - where groups of private equity funds jointly sponsored LBOs. The crux of the complaint, brought by shareholders of companies that were taken private, is that the private equity firms conspired to allocate the LBO market in order to pay less than fair value for the target companies. The court ruled that the plaintiffs alleged sufficient facts to plead an agreement in restraint of trade in violation of Section 1 of the Sherman Act. The court also rejected defendants' argument that their alleged conduct was immune from antitrust liability due to SEC regulation.