Private equity litigators are often the forgotten members of corporate law practices — sitting in the background while transaction and fundraising folks get all the glory (read: billable hours). But we’re seeing a reversal of fortune, as private equity firms today are more likely to get sued than to complete a new deal.
Last week, French security company Ingencio sued Francisco Partners, alleging breach of a non-disclosure agreement. Then came news that Investcorp and Leonard Green & Partners are named as defendants in a complaint brought by creditors of bankrupt ladder maker Werner Company.
And today we have yet another: Alliance Data Systems is suing Blackstone Group, for trying to weasel its way out of a $6.3 billion buyout. Blackstone told ADS last week that it would be unable to complete the transaction, because of what it felt were unreasonable requirements being placed on it by the Office of the Comptroller of the Currency. It also suggested an alternate — and smaller — transaction, like a PIPE.
ADS responded with lawyers, arguing that Blackstone has not exercised “reasonable best efforts” to find an amenable regulatory solutions. Unlikely we’ll get to see an actual trial (see: United Rentals, Sallie Mae), but there will certainly be a public hearing or two…
Go here for a press release put out today by Alliance Data.