Private Equity Parent Fights Back on Negligence Claim

 GWINNET COUNTY, GEORGIA -- A plaintiffs’ lawyer with a track record of $100+ million verdicts filed suit on behalf of two men killed by the collapse of a billboard manufactured by a portfolio company associated with a prestigious private equity investment firm which we represent. Because the plaintiffs sought damages well beyond the limits of the portfolio company’s insurance, they brought a claim directly against the private equity company.

Any judgment against a private equity firm for the debts of a portfolio company could have a chilling effect on the entire private equity industry. We were able to successfully devise a strategy, employing both traditional corporate structure defenses and a more creative argument relying upon a brand new state statute, to convince the plaintiffs that the risks associated with trial were too great. As a result, the plaintiffs settled for an amount well within the insurance policy limits of the portfolio company. Afterward, we counseled our client’s employees on behaviors designed to reduce exposure to similar arguments in the future.