Apollo Stole Litigation-Funding Trade Secrets, Suit Claims

Two Apollo Global Management units were accused by a firm that funds high-stakes lawsuits of stealing its method for calculating the value of the cases.

Greenpoint Capital Management, which raises money from investors and lends it to law firms involved in litigation that may result in big settlements or verdicts, sued Apollo Hybrid Value Management LP and Apollo Hybrid Value Management GP in Manhattan federal court late Wednesday.

Brooklyn, New York-based Greenpoint claims it provided Apollo trade secrets as part of a proposed investment in litigation finance. Apollo then passed them along to a Greenpoint competitor, Kerberos Capital Management LL, in which Apollo was investing, according to the suit. Greenpoint said it developed a way to value legal cases to reduce risk and boost returns to investors.

An Apollo spokeswoman said the case has no merit and the firm plans to defend itself in court.

Kerberos, which is not a defendant in the case, also disputed Greenpoint’s claims.

“Kerberos has originated $300mm in law firm loans since 2018,” the company said in an emailed statement. “Our investors include some of the world’s most respected pension funds, multi-family offices, and asset managers. The idea that Kerberos modeled its business on some broker’s marketing material is meritless.”

The suit comes as Apollo has been dealing with fallout from business ties between Chief Executive Officer Leon Black and deceased sex offender Jeffrey Epstein. Black said in January he’d relinquish his CEO role after a review by law firm Dechert LLP found that he had paid Epstein $158 million for financial services advice. The report found no evidence Black was involved with any criminal activities and showed Apollo did no business with Epstein.

Greenpoint, which is demanding unspecified damages, claimed that its email-logging software showed that a February 2020 email to Apollo containing its confidential documents was “opened by an individual located in or near Illinois.” Kerberos is based in Chicago. Neither of the Apollo units that were sued have offices in Illinois, Greenpoint said.

A survey by Westfleet Advisors, a litigation finance broker, showed 46 funding companies in the U.S. managed in mid-2020 a combined $11.3 billion in assets allocated to U.S. commercial litigation investments.

The case is: Greenpoint Capital Management v. Apollo Hybrid Value Management, 21-cv-01654, U.S. District Court, Southern District of New York (Manhattan).

©2021 Bloomberg L.P.

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