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A Bermuda court has ordered a halt to a lawsuit filed in New York against Apollo Global Management in a decision that could have implications for investors in foreign-registered companies traded on US stock exchanges.
The temporary injunction was obtained by Apollo’s affiliated life insurance company, Athene Holding, which is listed on the New York Stock Exchange but incorporated in the island territory of Bermuda.
The order purports to bar a US-based Athene shareholder, Central Laborers’ Pension Fund, from pursuing a lawsuit that accuses Apollo of “looting” the insurance company by charging “extravagantly expensive” fees running into hundreds of millions of dollars a year.
Apollo and Athene declined to comment on the Bermuda order. Apollo has said it will “vigorously” defend the case, and that the allegations lack any legal or factual basis. The private equity firm’s contract to manage a $130bn portfolio of assets on behalf of Athene accounts for one-third of the management fees earned by the private equity firm.
It is unclear whether the Bermuda order will prevent the New York lawsuit from proceeding. “[US] courts often will respect the judgments of foreign courts, though they may not be obligated to do so,” said Aryeh Portnoy, a partner at law firm Crowell & Moring. But he added that “context matters”, with judges likely to consider factors such as when the foreign lawsuit was filed and whether any constitutional rights are engaged.
Even before the Bermuda court issued its injunction, the pension fund faced a potential battle to persuade judges that they should hear the lawsuit in New York.
Athene maintains that the suit should have been filed in Bermuda itself, which, under the company’s articles of incorporation has sole authority to adjudicate matters relating to the directors’ conduct. The pension fund says … Read More...