Apollo Restructuring Judge Hit With Recusal Bid Over Skadden Tie

A Delaware judge’s links to a major law firm should compel her to step aside from litigation challenging a $570 million payout by Apollo Global Management Inc. to its founders, according to court filings.

An offshore pension fund asked Vice Chancellor Bonnie W. David on Monday to disqualify herself from the case, which concerns the nine-figure payment Apollo made to its founders as part of its conversion from an umbrella partnership to an ordinary corporation. The lawsuit, filed in Delaware’s Chancery Court in 2023, says the restructuring was at least partly aimed at pushing out co-founder Leon Black, who was the subject of damaging reports about his ties to the sex-trafficking financier Jeffrey Epstein.

The legal dispute is part of a wave of cases challenging corporate transactions discarding the umbrella structure, including conversions by two other private equity giants, Carlyle Group Inc. and KKR & Co. The suits say influential insiders manipulated the restructurings to seize a disproportionate share of the savings the firms recouped following changes to the tax code in 2018.

Apollo, which cleared Black of wrongdoing after an internal investigation, has repeatedly denied any connection between the transaction and his links to Epstein. But a different judge said in a 2024 preliminary ruling that it was tentatively “reasonable to infer” Apollo “needed to engage in a restructuring, and that Black needed to leave,” to mitigate the scandal’s “catastrophic impact.” The litigation “exists because Black got tied up in the scandal surrounding Jeffrey Epstein,” the judge said at the time.

David took over the case after her elevation to vice chancellor last year. The disqualification motion was submitted under seal, but public filings suggest it concerns her past at Skadden, Arps, Slate, Meagher & Flom LLP, a law firm that advised Apollo on the restructuring. There doesn’t appear to be any information suggesting David herself participated in the deal. Skadden isn’t directly involved in the litigation.

The publicly filed documents include press about the restructuring, the 2024 court decision, a judicial ethics rule laying out recusal standards, and some of the emails between Epstein and a high-profile lawyer, Brad Karp, that drove Karp to resign the chairmanship of Paul, Weiss, Rifkind, Wharton & Garrison LLP. Paul Weiss teamed up with Skadden on the Apollo transaction.

‘Overabundance of Caution’

The attorneys who filed the motion recently prevailed on David to step away from the KKR restructuring case. Both requests cited a month-old American Bar Association opinion discussing the ethical duty of lawyers “to disclose information reasonably likely to require recusal” by a judge who “was aware of the relevant facts and deliberately disregarded their significance.”

David gave the KKR case to Chancellor Kathaleen St. J. McCormick, who weeks earlier handed David the final Delaware lawsuits against Elon Musk, which she swiftly sent to Tesla Inc.'s new home, Texas, where corporate cases are much harder for shareholders. Musk’s judicial recusal gambit—raising bias allegations against a judge he’d spent years attacking—immediately sparked fears that other aggrieved businesses, billionaires, or investors might follow his lead.

David’s decision in the KKR case, in which she said she was stepping aside out of “an overabundance of caution,” addressed those concerns head on. “Delaware lawyers owe a duty not to seek judicial reassignment to obtain a perceived litigation advantage,” the judge wrote May 4. “I am hopeful that this motion is an outlier.”

The language echoed McCormick’s own statements about Musk’s bias claims, which involved allegations that she’d endorsed a LinkedIn post taunting the billionaire. Although “I am not biased against the defendants in these actions,” it’s clear “disproportionate media attention surrounding a judge’s handling of an action is detrimental to the administration of justice,” she said in March.

The Anguilla Social Security Board is represented by Friedlander & Gorris PA, Robbins Geller Rudman & Dowd LLP, and Shobe & Shobe LLP. Black is represented by Quinn Emanuel Urquhart & Sullivan LLP. Apollo’s other founders and board members are represented variously by Richards, Layton & Finger PA, Young Conaway Stargatt & Taylor LLP, Weil, Gotshal & Manges LLP, Morris, Nichols, Arsht & Tunnell LLP, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo PC, O’Melveny & Myers LLP, and Robbins LLP.

The private equity firm is represented by Potter Anderson & Corroon LLP and Fried, Frank, Harris, Shriver & Jacobson LLP. Its special litigation committee is represented by Ross Aronstam & Moritz LLP and Willkie Farr & Gallagher LLP.

The case is Anguilla Soc. Sec. Bd. v. Black, Del. Ch., No. 2023-0846, motion filed 5/11/26.