(Bloomberg) -- Leon Black’s Apollo Global Management LLC says a defamation lawsuit filed by former partner Imran Siddiqui should be dismissed because Siddiqui breached legal and ethical obligations by creating a competing venture, Caldera Holdings, while still working at Apollo.
In a motion filed in New York State Supreme Court on Monday, Apollo says Siddiqui engaged in an “ongoing pattern of duplicitous and cognizable misconduct” that started when he was being paid millions of dollars as a senior partner of Apollo and a director of Athene Holding Ltd., the insurer that has become a cash cow for the private equity firm.
Siddiqui worked at Apollo for nine years, helping create Athene, which has become one of the largest providers of fixed-annuities in the U.S. In a prior role at Goldman Sachs Group Inc., he worked on a similar insurance venture. He left Apollo in 2017 and began to seek more than $1 billion to pursue deals in the insurance industry, Bloomberg reported last year.
Black and Apollo were sued in July by Caldera Holdings, which is controlled by Siddiqui. Caldera accused Apollo of engaging in a “disparagement campaign” in the marketplace and “issuing commercial and legal threats to those doing or considering doing business with Caldera.” Siddiqui accused Apollo and Athene of colluding to harm Caldera’s business and is seeking at least $1.5 billion in damages.
Apollo said in its court filing Monday that Siddiqui “secretly and deceptively used” the company’s “highly confidential and proprietary information to create a direct competitor.” The behavior “completely debunks the core allegation underlying Caldera’s case,” Apollo said.
Apollo cited in the court filing a January 2017 email Siddiqui received using his Apollo email address from a Bermuda law firm related to the new company and correspondence which Siddiqui had in March 2017 about meetings in Abu Dhabi, presumably to seek funding for the new venture. Those emails show Siddiqui directed his counsel to register names for Caldera in January 2017 and that the company was formed and operating in July 2017, Apollo said. Siddiqui left Apollo that year.
The emails “reflect no wrongful conduct whatsoever,” Lisa C. Solbakken, an attorney for Siddiqui, said in an email.
While Siddiqui claims Apollo has filed a “sham” arbitration against him to “eliminate” Caldera as a competitor, Apollo says “these emails demonstrate that this notion is patently untrue.” While an earlier dispute with Siddiqui was resolved in arbitration, Apollo said it is seeking to go back to the arbitrator.
Apollo established Athene in 2009, buying distressed insurance assets that were hit by the global financial crisis, according to the filing. The private equity firm took the insurer public in 2016.
Apollo shares slipped more than 20 percent this year through Monday, while Athene has dropped 16 percent.
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