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Unsealed docs: Did private equity firms conspire?

October 10, 2012: 3:23 PM ET

Buyout firms lose fight to keep emails private.

FORTUNE --A federal judge in Boston today unsealed a conspiracy lawsuit against several large private equity firms, related to large buyouts that occurred prior to the financial crisis.

The firms had initially argued that certain information contained in the amended complaint was trade secret and should, therefore, remain confidential.

The New York Times, which had been pushing for a full release, published a version of the complaint last month that contained dozens of black marks over sections that may have included emails between investors at firms like Bain Capital, The Blackstone Group, The Carlyle Group, KKR, TPG Capital and Silver Lake Partners.

I'm now beginning to read through the entire 221-page unredacted complaint, which is posted below. Here are a couple of sections that have jumped out at me so far:

There had been speculation that the unredacted version would include an email from Henry Kravis of Kohlberg Kravis Roberts & Co. (KKR) asking other private equity firms to "stand down" on the HCA (HCA) buyout. Turns out that line comes from someone at The Carlyle Group (CG):

More on the HCA deal below. Worth noting that, when HCA was being discussed, Blackstone (BX) and KKR had just completed a bruising battle for Freescale Semiconductor (FSL), which Blackstone ultimately won at an inflated price.

Speaking of Freescale...

Worth noting that Blackstone and KKR did bid together on Clear Channel, but they were beaten out by a rival offer from Bain Capital and Thomas H. Lee Partners. Somehow, all four firms are named as defendants in this suit (sometime co-conspirators, sometime rivals?).

In fact, such contradictions are peppered throughout the entire suit. As I wrote back when the complaint was originally filed, it's tough to argue conspiracy against so many firms on such a large number of deals, particularly when the record is clear that many of the defendants competed against each other on some of those very transactions.

As for price-fixing, I also don't quite see how the plaintiffs make that case. Take the example on SunGard, which was acquired for $11.3 billion in 2005. The complaint alleges bid-rigging because Silver Lake Partners invited TPG Capital into the deal after TPG suggested that it might mount a rival bid at between $34 and $38 per share. Okay, but Silver Lake's bid ultimately was $36 per share. Moreover, the suit neglects to note that The Carlyle Group and Thomas H. Lee Partners dropped out at the last minute because they felt the price was too high. So if Silver Lake bid in the middle of TPG's target range, and other firms though the price was too rich -- what superior bid was Silver Lake suppressing?

Anyway, more on this tomorrow morning in the Term Sheet newsletter. Read the entire suit below:

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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