Less than three weeks before the five-year battle between investors and Blackstone Group LP was set to go to what would have been a rare class action securities trial, the private equity giant agreed to pay $85 million to settle the case, according to court documents filed in Manhattan on Wednesday.
Under the terms of the settlement, Blackstone denies wrongdoing and liability in the case, in which investors accused the private equity company of making material omissions and misstatements in its registration documents and prospectus prior to its $4.7 billion initial public offering in 2007. The $85 million settlement, which is subject to court approval, represents approximately 12 percent of the $691.5 million in damages the plaintiffs thought was achievable at trial, according to the plaintiffs' memo supporting the settlement.
