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TCW Group fights possible injunction over sale to Carlyle Group
November 6, 2012 / 6:31 PM / 5 years ago

TCW Group fights possible injunction over sale to Carlyle Group

3 Min Read

* Carlyle acquisition of TCW may be in question

* Judge expected to issue final ruling within days-sources

By Jessica Toonkel

NEW YORK, Nov 6 (Reuters) - Los Angeles-based asset manager TCW Group is fighting to squelch efforts to block its sale to private equity firm The Carlyle Group LP.

On Tuesday, TCW will submit additional evidence to a Los Angeles judge who is leaning toward granting a request by EIG Global Energy Partners LLC to block the sale of TCW to Carlyle. A lawyer representing TCW said it will file its documents on Tuesday and that EIG will respond on Wednesday.

In August, EIG filed a lawsuit attempting to block the asset manager TCW's takeover by private equity firm Carlyle Group LP. Earlier that month, Paris-based Societe Generale agreed to sell its stake in TCW to Carlyle and TCW management and employees.

In its lawsuit, EIG, which was spun off by TCW in early 2011, contends the deal with Carlyle, which is expected to close in the first quarter of 2013, violates certain contractual rights granted to EIG as part of its separation from TCW.

The dispute involves a joint venture between EIG and Los-Angeles based TCW that was put in place at the time of the spin-off. Carlyle has energy funds that compete directly with EIG's funds. EIG in its contract with TCW has the right to approve any change of control affecting the joint venture, according to the lawsuit.

Carlyle's energy funds had $16 billion of assets under management while EIG had $10.6 billion of assets under management as of the end of June.

On Monday, Judge Christina Snyder of the U.S. District Court for the Central District of California handed out the temporary ruling, according to the source, who declined to be identified because of the sensitivity of the situation. C ou rt officials were not immediately available to comment.

Parties typically ask courts to issue injunctions when they believe they will suffer irreparable harm from the other party's conduct. Injunctions aim to stop that conduct. Courts will sometimes issue temporary injunctions if the risk of harm is substantial, until a hearing can be held to more thoroughly determine the risks and facts.

Thomas Jerome Nolan, an attorney with Skadden Arps Slate Meagher and Flom LLP, which is representing TCW, said in an email to Reuters that if the judge does side with EIG, "she indicated she would consider suggestions to propose possible forms on an injunction to narrow its scope if possible."

The judge is expected to issue a final ruling on the injunction within a few days of the submission, said three sources familiar with the situation.

An EIG spokesman was not immediately able to comment.

"We look forward to a prompt resolution of these narrow issues involving EIG through arbitration, and we remain fully committed to moving forward with the Carlyle transaction in a timely fashion," TCW spokesman Peter Viles said.

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