Jef Feeley
Wed, August 23, 2023
(Bloomberg) -- Apollo Global Management was sued by an investor seeking information about $570 million in payments the private equity firm made to founders Leon Black, Josh Harris and Marc Rowan after Black’s ouster over his ties to sex offender Jeffrey Epstein.
The Anguilla Social Security Board filed a lawsuit on Aug. 17 that was unsealed yesterday in Delaware Chancery Court. The pension fund asked for an order requiring Apollo to produce records explaining why the three received the payments as part of a restructuring effort in the wake of the Epstein scandal.
“The process leading to the challenged payoff was rife with conflicts and procedural unfairness,” lawyers for the Anguilla fund said in the 83-page complaint filed in Delaware Chancery Court. “It is far from clear what the justification for the $570 million payment was.” The fund’s suit was first reported by the Financial Times.
Black has continued to be in spotlight over his ties to Epstein even after his 2021 Apollo departure. He sued Harris and several other people alleging they conspired with Russian model Guzel Ganieva to destroy his reputation with allegations of rape and abuse. A judge dismissed that suit last year. Black last week sued the law firm that previously represented Ganieva and has brought claims by two other women who claim the Apollo co-founder assaulted them inside Epstein’s New York mansion.
Black has admitted paying Epstein $158 million for tax and financial services but has denied knowing of his sex crimes.
Apollo didn’t immediately respond to a request for comment about the Anguilla fund’s suit seeking books and records. Such cases are frequently filed in Delaware to gather ammunition for later lawsuits.
Black stepped down as chairman of Apollo in March 2021, amid growing scrutiny of his ties to Epstein and the allegations by Ganieva. An explosive lawsuit by the model, with whom Black said he had a consensual relationship, was dismissed in May.
According to the Anguilla fund’s suit, Apollo officials said they agreed to pay the $570 million in payments to cover the founder’s tax liabilities as part of the reorganization following Black’s departure.
“Apollo publicly disclosed virtually nothing about the challenged payoff, the process leading to it, or the reasons for it,” attorneys for the Anguilla fund said. “An independent third party acting at arm’s length would not have paid Black and his co-founders any number approaching $570 million.”
The case is Anguilla Social Security Board v. Black, 2023-0846, Delaware Chancery Court (Wilmington).
(Updates with details from complaint, background.)
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