As the real estate market was turning sour in 2007, Blackstone Group LP was preparing to go public. Timing was not quite perfect, however, as the world’s largest private equity firm happened to be heavily invested in property and other particularly vulnerable holdings. While Blackstone’s IPO launched at $31 per share, market troubles and the firm’s exposure led to sharp declines within the next year–in 2008, its shares were trading at less than one-quarter of that price. Litigation ensued, with some investors claiming that Blackstone’s executives had not properly disclosed the declining values of some of its assets during the IPO process.
After five years of litigation, the parties have reached a settlement. A U.S. federal judge, sitting in Manhattan, must still approve of the $85 million agreement. For more detailed coverage of the case and its developments, see Businessweek and Reuters.