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UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS KIRK DAHL, et al., Individually and on Behalf) of All Others Similarly Situated, ) Plaintiffs, vs. BAIN CAPITAL PARTNERS, LLC, et al., Defendants. ) ) ) ) ) ) ) ) _____________________________ ) Lead Case No. 1:07-cv-12388-EFH CLASS ACTION FIFTH AMENDED CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL ANTITRUST LAWS Leave to File Granted on June 14, 2012 DEMAND FOR JURY TRIAL FILED UNDER SEAL Case 1:07-cv-12388-EFH Document 745 Filed 10/10/12 Page 1 of 221TABLE OF CONTENTS Page INTRODUCTION ........................................................................................................................... 1 THE PARTIES ................................................................................................................................. 6 Plaintiffs ............................................................................................................................... 6 Defendants ........................................................................................................................... 7 Co-Conspirators ................................................................................................................. 12 JURISDICTION AND VENUE .................................................................................................... 14 TRADE AND COMMERCE ......................................................................................................... 15 MODE OF ANALYSIS OF THE CLASS' ANTITRUST CLAIMS ............................................ 15 CLASS ACTION ALLEGATIONS .............................................................................................. 19 DEFENDANTS' OVERARCHING CONSPIRACY ................................................................... .22 Defendants Agree Not to Let History Repeat Itself.. ........................................................ .23 The Rules of the Game: Conspiratorial Rules and Conduct for Large LBOs .................. 25 Defendants Monitored Compliance with the Rules .......................................................... .32 THE ROLE OF THE INVESTMENT BANKS ............................................................................ 34 UNITED STATES DEPARTMENT OF JUSTICE INVESTIGATION ....................................... 38 THE LBOS AND RELATED TRANSACTIONS IN THE CONSPIRACY ................................ 40 Nalco .................................................................................................................................. 40 Cablecom ........................................................................................................................... 46 The PanAmSat LBO ......................................................................................................... .48 The AMC LBO and Subsequent Merger with Loews ,. ..................................................... 55 The AMC Transaction ............................................................... , ....................................... 56 The Loews Transaction ...................................................................................................... 59 The AMC!Loews Merger ................................................................................................... 62 - i -Case 1:07-cv-12388-EFH Document 745 Filed 10/10/12 Page 2 of 221Page The Toys "R" Us, Inc. LB0 ............................................................................................... 62 The SunGard LBO ............................................................................................................. 68 The Neiman Marcus LB0 .................................................................................................. 75 Warner Music ..................................................................................................................... 80 The Texas Genco LBO ...................................................................................................... 82 Susquehanna ...................................................................................................................... 89 The Education Management Corporation LBO ................................................................. 91 The Univision LB0 ............................................................................................................ 99 The Michaels Stores LB0 ................................................................................................ 109 The HCA LBO ................................................................................................................. 116 The Aramark LBO ........................................................................................................... 124 The Kinder Morgan LB0 ................................................................................................. 131 The Freescale LBO .......................................................................................................... 139 PhilipsMXP ..................................................................................................................... 146 Vivendi ............................................................................................................................. 152 The Harrah's LBO ........................................................................................................... 154 The Clear Channel LBO .................................................................................................. 160 The Sabre Holdings LB0 ................................................................................................. 167 The Biomet LBO .............................................................................................................. 173 The TXU LBO ................................................................................................................. 180 Community Health Systems ............................................................................................ 186 The Alltel LBO ................................................................................................................ 188 - ii -Case 1:07-cv-12388-EFH Document 745 Filed 10/10/12 Page 3 of 221Page ECONOMIC EVIDENCE OF THE CONSPIRACY AND ITS ANTICOMPETITIVE EFFECTS ......................................................................................................................... 195 THE OFFICER STUDY .............................................................................................................. 196 ALTERNATIVE ECONOMIC RATIONALES ARE IMPLAUSIBLE .................................... .l99 CLUB DEALS REFERENCED IN THIS COMPLAINT ........................................................... 200 SETTLEMENT AGREEMENTS AND PURPORTED RELEASES ......................................... 206 FRAUDULENT CONCEALMENT AND TOLLING ................................................................ 207 CLAIMS FOR RELIEF ............................................................................................................... 209 First Claim for Relief ................................................................................................................... 209 Overarching Market Allocation and Horizontal Price Fixing Per Se and Rule of Reason Violations, 1 ofthe Sherman Act, 15 U.S.C. 1 .............................................. .209 Second Claim for Relief. .............................................................................................................. 211 Bid Rigging- Per Se Violations- 1 of the Sherman Act, 15 U.S.C. 1 (Against Bain, Blackstone, Carlyle, Goldman Sachs, KKR and TPG) .......................................... 211 REQUEST FOR RELIEF ............................................................................................................ 212 JURY TRIAL DEMAND ............................................................................................................ 213 - iii-Case 1:07-cv-12388-EFH Document 745 Filed 10/10/12 Page 4 of 221Plaintiffs, Kirk Dahl, Police and Fire Retirement System of the City of Detroit, Helmut Goeppinger, Rufus Orr, Robert Zimmerman, and City of Omaha Police and Fire Retirement System (collectively, "Plaintiffs"), on behalf of themselves and all others similarly situated, by and through their undersigned attorneys, allege the following for their Fifth Amended Class Action Complaint for Violations of the Federal Antitrust Laws: INTRODUCTION 1. This action challenges a market allocation and bid-rigging conspiracy that violates Section 1 of the Sherman Act, 15 U.S.C. 1. Plaintiffs are former shareholders of certain public companies who sold their shares to the Defendant private equity firms in large leveraged buyouts ("LBOs") announced between 2003 and 2007 ("the Conspiratorial Era"). Rather than compete, Defendants agreed to work together to allocate deal outcomes and purchase the target companies at artificially suppressed prices, depriving shareholders of billions of dollars. 2. Defendants' conspiracy involves 19 LBOs of large publicly-held companies, and eight related transactions.1 The 19 LBOs include PanAmSat, AMC, SunGard, Neiman Marcus, Michaels Stores, Aramark, Kinder Morgan, HCA, Freescale, Toys "R" Us, Texas Genco, Education Management, Univision, Harrah's, Clear Channel, Sabre, Biomet, TXU, andAlltel. The other eight transactions, in which Defendants purchased target companies that were not LBOs, include Philips Semiconductor, Loews, Vivendi, Community Health Systems, Nalco, Cablecom, Susquehanna and Warner Music. These LBOs and transactions were not separate, isolated events; rather, they were As set forth in Plaintiffs' Overarching Conspiracy Class definition, Plaintiffs seek damages and other relief for only 17 of the LBOs. Specifically, Plaintiffs