Carlyle Founders Lose Round in Court on $344 Million Deal (1)

Carlyle Group Inc.'s founders and board lost their initial bid Monday to end litigation in Delaware over a $344 million payment aimed at buying out tax agreements related to the asset manager’s initial public offering.

Vice Chancellor Morgan T. Zurn let the case move forward in a preliminary ruling against Carlyle’s billionaire co-founders—William Conway Jr., Daniel D’Aniello, and David Rubenstein—and other corporate leaders. The lawsuit brought by a pension fund says they pushed the private equity giant to drastically overpay in a buyout of virtually worthless tax benefit agreements.

Zurn, ruling from the bench for Delaware’s Chancery Court, stressed that ...