Two lawsuits filed in New York courts have been withdrawn after Bermuda Chief Justice Narinder Hargun upheld claims by Bermudian-based Athene Holding Ltd that such matters are the exclusive jurisdiction of the island’s courts.
A US-based investor in Athene, Central Laborers Pension Fund, made a derivative complaint against private-equity firm Apollo Global Management LLC and Athene Asset Management LLC.
The plaintiff, on behalf of Athene shareholders, demanded damages for what it described as “looting” of Athene through “extravagantly expensive” fees paid for managing the reinsurer’s investment portfolio, according to the complaint, filed in the Supreme Court of New York on June 18.
The fees agreed for managing the portfolio of about $130 billion run into hundreds of millions of dollars per year.
Athene maintained that the suit should have been filed in Bermuda as the case hinged on the conduct of its directors, the Financial Times reported. According to the company’s by-laws, the FT said, any such matters must be resolved in Bermuda courts.
Mr Justice Hargun granted an ex parte temporary injunction on July 5, ordering a halt to the CLPF action in New York.
Thereafter, Cambria County Employees Retirement System — a public pension fund in Pennsylvania — launched a separate New York action, which made no reference to the conduct of directors. Cambria also sought an order from the New York court preventing Athene “from attempting to interfere with” the suit, according to a report in the FT.
However, before the matter could be heard in New York, Athene again sought relief from the Supreme Court of Bermuda, and Mr Justice Hargun ruled in favour of Athene.
The plaintiffs in the two matters subsequently withdrew the suits, citing the Bermuda injunctions, according to the FT.
Apollo, the co-defendant in both matters, said the claims were “completely without merit and would fail in any jurisdiction”, the FT reported. Calling the dismissals “a routine application of Athene’s by-laws, which clearly provide that Bermuda is the proper forum for litigation”, Apollo added that the two cases were brought by the same law firm and “were ultimately nothing more than a failed attempt to forum-shop”, the FT said.
A spokesman for Athene said the company had no comment.