Zayo Ex-CEO Must Face Narrowed Challenge to $14.3 Billion Buyout

Zayo Holdings Group Inc.'s ex-CEO dodged most of a pension fund lawsuit over its $14.3 billion take-private buyout, but he must face claims that he kept investors in the dark about certain pre-deal talks with one of the acquirers, Digital Colony Partners LP, a Delaware judge ruled.

Vice Chancellor Paul A. Fioravanti Jr. advanced a single disclosure count against former Zayo chief Dan Caruso, who allegedly pushed the transaction—reportedly the second-largest leveraged buyout since the 2008 financial crisis—in exchange for rollover equity and a lucrative post-deal job.

EQT Fund Management SARL also participated with Digital Colony in the buyout. The ...