* Issues tentative ruling, TCW has chance to respond
* Judge expected to issue final ruling within days -sources
By Jessica Toonkel
Nov 6 A federal judge in Los Angeles has issued
a tentative ruling that could block a sale of asset manager TCW
Group to private equity firm The Carlyle Group LP.
If TCW is not successful in convincing the judge otherwise,
the ruling may become final.
The tentative ruling stems from a lawsuit filed in August by
EIG Global Energy Partners LLC to block the sale of TCW to
Carlyle. Earlier in August, 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. According to the lawsuit, EIG's contract with TCW
includes the right to approve any change of control affecting
the joint venture.
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 shared a tentative ruling
in favor of EIG's case, but TCW has the opportunity to respond.
On Tuesday, TCW will submit additional evidence to the
court, wrote Thomas Jerome Nolan, an attorney with Skadden Arps
Slate Meagher and Flom LLP, which is representing TCW, in an
e-mail to Reuters Tuesday morning. EIG will respond on
"We are very pleased by the tentative ruling and look
forward to it becoming finalized," an EIG spokeswoman said. "We
will have more to say once that has happened."
In his e-mail, Nolan wrote that if the judge does grant the
injunction to EIG, she would consider narrowing its scope.
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.
"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.