Goldman Sachs Group Inc. won dismissal of a Hollywood management firm’s lawsuit claiming it was misled about a $7 billion private equity deal that allegedly spoiled the market for its own bid to be acquired.
A New York judge ruled Wednesday that KSFB Management had brought flawed fraud and contract claims against Goldman based on misinterpretations of its agreement with the bank. According to Variety, KSFB’s principals have managed business affairs for celebrities including Beyonce, Drake and Adam Levine.
The suit KSFB filed last year stemmed from a complex series of transactions. The firm’s principals were previously with Nigro Karlin Segal Feldstein & Bolno, the management firm led by legendary Hollywood accountant Mickey Segal. Nigro Karlin sold its operational assets to Focus Financial Partners in 2018, with KSFB becoming a separate firm that provided management services to Focus under contract.
According to the suit, Focus retained Goldman in 2022 to explore selling itself. KSFB claimed it was also considering putting itself on the market, but that Goldman told the firm it would pursue a deal that included KSFB. The firm said it provided confidential information to the bank based on that representation, but Goldman at that time was already negotiating Focus’ $7 billion acquisition by Clayton Dubilier & Rice, a deal that didn’t include KSFB.
In her decision dismissing the suit, New York Justice Margaret Chan said KSFB’s claims were barred by a “specific and unambiguous” disclaimer in the bank’s engagement letter stating that it might be advising on other transactions that could impact a deal for KSFB.
A lawyer for KSFB didn’t immediately respond to a request for comment.
Chan also dismissed the KSFB’s claims against Focus, an investment group specializing in wealth and business management firms, its co-founder Leonard Chang and Goldman banker Patrick Fels.
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