The American Investment Council (AIC), a leading private equity trade group, has filed a proposed amicus brief supporting KKR’s effort to dismiss a high-profile Department of Justice (DOJ) lawsuit, which seeks over $650 million in fines for alleged premerger filing violations. The group warns that the DOJ’s position effectively turns the merger notification process into a legal “trap.”
The DOJ lawsuit, filed in January, accuses KKR & Co. of systematically omitting and altering required documents during 16 transactions from 2021 to 2022, in violation of the Hart-Scott-Rodino (HSR) Act. The suit highlights major deals — including one worth $6.9 billion — that allegedly bypassed required notice entirely.
In its brief, the AIC asserts that the DOJ is attempting to rewrite the rules of merger notification by demanding “perfect compliance” rather than the longstanding legal standard of “substantial compliance.” AIC contends this shift would impose excessive burdens and legal risks on merging parties, particularly in the private equity sector.
“DOJ’s interpretation would transform the HSR Act’s modest notification regime into a trap for massive liability,” said the AIC in its filing. “This new standard would require merging parties to conduct exhaustive document reviews akin to full-blown litigation, drastically increasing compliance costs and chilling legitimate investment activity.”
KKR has also filed its own lawsuit, arguing the DOJ’s enforcement is unconstitutional, vague, and excessive. Though KKR recently dropped its claim seeking affirmation that no violation occurred, both parties have agreed to pause further proceedings while the court considers KKR’s motion to dismiss.
The DOJ maintains that KKR’s omissions constituted “substantial noncompliance” and argues no “magic words” are needed to validate the seriousness of its claims.
The AIC further emphasized that neither the DOJ nor the Federal Trade Commission has ever enforced the HSR Act to this extreme, stating that this case is unprecedented and threatens to raise transaction costs dramatically for future deals.
The outcome of the case — U.S. v. KKR & Co. Inc. — could redefine the compliance expectations for companies involved in mergers and acquisitions, especially under the evolving scrutiny of antitrust authorities.
