The Band of Merry Fools is a group of adventurers consisting of Turpin, Nelik, Farluck and their leader, Gorpel Hind. They can be found in Baldur's Gate Northwest at the bar in Helm and Cloak tavern. After you talk to them, another party called the Maulers of Undermountain will enter the tavern and its leader, Gretek, will initiate conversation with Gorion's Ward or the nearest party member; all responses cause the Maulers to become hostile. If you have chosen conversation option 1 in the talk with Gorpel Hind, then the Merry Fools will help you in the fight and leave after it. Choosing option 2 results in them leaving immediately.
One of the good tactics for this fight is having your fighter near the door and the other party members further away before starting conversation with Gorpel, as after the Maulers arrive, they will all be in one place. Give your fighter as much fire resistance buffs as you can through potions, items and/or spells and, after the Maulers come, cast fireballs in the area. If you have a good-aligned party, watch for civilians, as killing them results in a large Reputation loss. Killing the whole party results in total of 5250 XP, 214 gold pieces and many items including the Battleaxe of Mauletar, Bracers of Defense A.C. 7, Adventurer's Robe and a Long Sword +1.
Nivek in the docks mentions that Gorpel and his band captured a (now on the loose) basilisk a few weeks back.