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Nearly half of all private equity executives surveyed by insurance broker Marsh Inc. expect more lawsuits against private equity companies over the next two years, according to a new Marsh study. The New York-based Marsh’s survey of 171 private equity directors, managing directors and partners at 150 private equity firms worldwide found that 47% expect more litigation, 43% expect the same level of litigation and 6% expect a decrease. Minority shareholders account for 46% of U.S. lawsuits already filed, according to an analysis of 94 claims and notifications received by Marsh’s private equity clients from January 2004 to February 2007. That compares with 18% brought by companies the private equity firm is invested in and 15% brought by liquidators. Top lawsuit allegations include breach of fiduciary duty, securities fraud and employment issues. Of North American survey respondents, 83% pointed to regulators as the top source of potential allegations while 76% said managers of companies the private equity funds are invested in are likely litigants. Despite this perception, Marsh reported that regulators currently account for only 2% of legal actions.

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