Dispute involving Apollo co-founders Black, Harris boils over

Pressure among Leon Black and his Apollo World wide Management Inc. co-founder Josh Harris is boiling more than, threatening to buffet the investment big with new controversy.

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In a filing last week in a rape and defamation case brought by a lady with whom he has admitted to getting a yearslong affair, Black accused Harris of plotting his elimination from Apollo in an act of revenge for being passed about to be successful Black as chief government officer.

The personal-fairness titan, who stepped down as Apollo’s CEO and chairman in March 2021, even further suspects Harris encouraged his ex-lover, Guzel Ganieva, to publicly accuse him of rape and harassment. Mr. Black has been assembling e-mail and other substance to try to show the allegations, according to folks familiar with the subject and copies of some of the e-mail that ended up seen by The Wall Avenue Journal.

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Harris “waged a highly coordinated and orchestrated campaign to demolish Black’s specialist and individual standing,” mentioned Black’s law firm, Susan Estrich. Harris’s advisers “whispered to buyers, placed article content and in the long run supported and encouraged an effort and hard work by Ganieva to make knowingly fake promises in the courts about her romance with Mr. Black,” she said.

Harris, who stepped down from his working day-to-day part at Apollo at the starting of this yr, vehemently denies the claims.

“These allegations and insinuations are desperate and absurd,” a spokesman for Harris explained. “Harris doesn’t know Ganieva, has under no circumstances met or spoken with her or anyone symbolizing her, has no monetary or any other dealings with her or her representatives, and had no involvement of any sort in the filing of any statements by her.”

Ganieva leveled the accusations in a lawsuit in opposition to Black in June past year in New York Condition Supreme Court docket. In October, Black filed a civil RICO go well with in federal court docket towards Ganieva, her legislation business and a collection of John Does, alleging defamation and racketeering. He comprehensive his allegations towards Harris in an amended submitting in that go well with on Monday.

“This conspiracy theory, and the concept that Josh Harris is somehow funding our client’s lawsuit or doing the job in conjunction with Ganieva is madness,” explained Jeanne Christensen of Wigdor LLP, Ganieva’s legal professional.

Regardless of no matter whether Black’s allegations have any benefit, the spat could turn out to be another headache for Apollo, where Harris however sits on the board, right after it was forced to endure the twin scandals of Black’s relationship to disgraced financier Jeffrey Epstein and Black’s lawful battle with Ganieva.

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The agency has labored to go further than the tumult, instituting a series of governance adjustments. Marc Rowan, the firm’s third co-founder who became CEO when Black stepped down, currently has his hands full integrating the acquisition of the rest of the firm’s major insurance plan affiliate, Athene Holding Ltd.

“The agency has by no means been far more aligned or improved positioned to produce worth for all of our stakeholders,” an Apollo spokesman claimed. “The authorized dispute enjoying out in between two previous staff is unfortunate but won’t impression our strategy, organizations, or mission.”

The controversy encompassing Black, a private-fairness pioneer who designed Apollo into a $481 billion behemoth, has weighed on the firm’s shares. Though up, they have considerably underperformed people of its chief rivals since the October 2020 publication of a New York Instances report detailing for the 1st time some of Mr. Black’s payments to Epstein. Some analysts also cite the Athene deal as a element in the underperformance.

Black has received a quantity of e-mails from early 2021. One particular of them was despatched to Harris by Pendral Money President Richard Emerson, who would afterwards get a seat on Apollo’s board that he however occupies, minutes after the organization announced Rowan would be CEO. In the e-mail, which bears the subject line “outrageous,” Emerson criticized the board for enabling Black, who states he paid out Epstein $158 million for tax and estate-preparing products and services, to stay at the company as chairman. Mr. Emerson said that Harris was “the suitable man or woman to be CEO.”

Harris forwarded Emerson’s email to a team of exterior authorized and public relations advisers, a single of whom responded, “accurately.”

Emerson didn’t react to requests for comment.

Harris, his spokesman stated, “was immediate with Black that his connections to Epstein were being damaging the enterprise. The notion that Harris was inspired by anything at all other than the finest passions of the enterprise is bogus — Black’s connection with Epstein was disqualifying, simple and basic.”

The battle represents a bitter twist in a person of the most profitable relationships in Wall Road heritage. Black helped make Harris a billionaire, providing him the title of co-founder in 2007 forward of Apollo’s prepared initial community supplying. Harris is truly worth $5.9 billion, in accordance to Forbes, largely by virtue of his 6.4% stake in Apollo Black’s 11.9% stake has aided place his internet worthy of at $10.4 billion.

Apollo explained in January final year that Black would action down as CEO, ceding the part to Rowan, but would remain chairman. The announcement followed a monthslong overview by law company Dechert LLP of Black’s ties to Epstein, a convicted sexual intercourse offender who killed himself in 2019 although awaiting demo on costs similar to sexual intercourse trafficking of minors.

It arrived as a surprise to several inside Apollo who had assumed Harris was up coming in line. Then, in March, immediately after Ganieva went community with her allegations in a collection of tweets, Black was compelled to depart the firm totally.

The wheels had been in motion for some time for Rowan to get in excess of, in accordance to individuals acquainted with the subject. Harris, who experienced been overseeing Apollo’s working day-to-working day functions, arrived to Black a selection of yrs ago inquiring to be designed CEO, but Black turned him down given that Apollo’s business enterprise was moving toward handling property for insurance policies firms, the individuals reported — neither Harris’s nor Black’s space of knowledge.

Rather, Black asked Rowan, the architect of the firm’s remarkably prosperous foray into insurance policies, to be CEO, but Rowan demurred. Black recurring the ask for in 2019 when Apollo additional to its preliminary 17% stake in Athene, the people stated. Once more, Rowan declined, stating he was nevertheless centered on constructing the insurance policies company, the people today reported.

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Black again broached the issue with Rowan in Oct 2020 through a 5-mile wander around Black’s Bedford, N.Y., property, the people stated. This time, Rowan was additional amenable. The two executives discussed the idea of shopping for the rest of Athene and decided that Rowan must turn out to be CEO if Apollo finished up continuing, the folks claimed.

The very last time Black spoke with Harris, through a meeting last January at Black’s Bedford home, Black advised him the selection to recommend Rowan wasn’t own, but was most effective for Apollo’s upcoming, the people today explained.

Harris’s spokesman mentioned that Harris supported Rowan’s ascension as CEO.

—Mark Maremont contributed to this post.