Judge May Unseal Antitrust Complaint Against Bain Capital
(CN) - A federal judge may unseal an antitrust complaint against Bain Capital for reporters who want to cover the allegations against Mitt Romney's former company.
Shareholders accused 11 firms, including Bain Capital Partners, of forming bidding "teams," to rig the market for leveraged buyout deals.
The teams allegedly limited the number of bidders and depressed prices at target companies. Shareholders said they received lower average premiums in bids involving joint buyouts than single-purchaser deals.
Romney co-founded Bain Capital in 1984 and ran the company until he campaigned for governor of Massachusetts in 2002 - a position he won the following year and held until 2007 when he sought the Republican presidential nomination. Though Romney lost the 2008 nomination to Sen. John McCain, he became the official 2012 nominee in August.
Two months earlier, the plaintiffs filed a fifth amended complaint, incorporating new information collected in discovery. It was filed under seal pursuant to a 2009 protective order.
After The New York Times intervened and asked the court to lift the protective order, U.S. District Judge Edward Harrington found that the public right of access outweighed Bain's asserted business interests.
"Defendants assert that allowing this information to be disclosed would hinder their ability to identify and attract fund investors, execute leverage buyouts, and run portfolio companies," he wrote. "They further assert that the information, if disclosed, could be used by competitors 'to copy critical aspects of the defendants' business, which defendants have spent significant time and money developing and refining.'"
But Bain and the other defendants have failed to "explain how the particular information that they have redacted causes specific and severe harm," Harrington added. "It is further unclear to the court whether the redactions are narrowly tailored to addressing that harm. The defendants at this time have only supported their position with general assertions of harm, which are insufficient to overcome a presumption of public access."
Bain will get another chance, however, to propose a redacted version and clearly describe how unrestricted public access to the complaint will harm it.
"The court, however, shall not approve a filing where pages of the complaint are redacted with insufficient explanation or solely because they contain quoted material from documents garnered during discovery," Harrington wrote.
The defendants should furthermore not use this opportunity to shield blocks of information solely because some of the information tangentially touches on a legitimate business interest. Any redactions should be limited and narrowly tailored to preventing the specific harm to their asserted interests."