Carlyle Proposes Lawsuit Ban In IPO Documents

Jan 26 2012 | 1:23am ET

The Carlyle Group is seeking to preemptively put a stop to one of the more unpleasant aspects of life as a public company: shareholder lawsuits.

Washington, D.C.-based Carlyle revised its initial public offering documents last week. Under the new terms, all shareholders will have to settle claims against the private equity giant at arbitration. Lawsuits in both state and federal court, including class-action lawsuits, would be barred, and all investors who buy Carlyle shares would automatically accept the provision. What’s more, all arbitration proceedings and awards would remain confidential.

The provision is a novel one: None of the private equity firms to precede Carlyle in the public markets sought to prevent their future shareholders from suing.

Whether Carlyle can make the provision actually stick is unclear—some experts are skeptical. Under U.S. securities laws, investors are forbidden from waiving their rights to seek damages. The Securities and Exchange Commission must approve Carlyle’s registration statement, including the arbitration provision, before the firm can list on the Nasdaq Stock Market.

All arbitration proceedings would take place in Wilmington, Del., Carlyle said.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.