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Judge lets U.S. deal collusion lawsuit proceed against 8 defendants

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(Reuters) — A federal judge has allowed investors to pursue a closely watched lawsuit accusing several of the world's largest private equity firms of colluding to drive down prices on companies they sought to buy.

While dismissing two defendants from the case, U.S. District Judge Edward Harrington in Boston on Thursday said there are open issues as to whether eight other defendants were part of an "overarching" conspiracy to drive down prices on roughly a quarter trillion dollars of takeovers.

Judge Harrington rejected requests by Bain Capital Partners L.L.C., Blackstone Group L.P., Carlyle Group L.P., Goldman Sachs Group Inc.'s private equity arm, KKR & Co., Silver Lake Partners, Thomas H. Lee Partners L.P. and TPG Capital Management L.P. to be dismissed from the lawsuit.

Apollo Global Management L.L.C. and Providence Equity Partners Inc., in contrast, won dismissal.

The plaintiffs include shareholders in formerly publicly traded companies that were bought by the private equity firms between 2003 and 2007.