Private Equity Firm's Attempt to Impose Arbitration on Investors Fails
Near the beginning of the year the private equity firm, Carlyle Group LP, caused a stir when the company amended its registration statement for its $1 billion initial public offering to include a condition requiring stockholders to forego their right to sue individually or as a class and instead participate in arbitration. The provision came atop of the elimination of other traditional shareholder rights, and many wondered whether the Securities and Exchange Commission would approve a corporate governance structure so unfriendly to shareholders.
The arbitration requirement ...