The fund targeted by the April 26 lawsuit never participated in originating life insurance policies, instead acquiring pools of insurance-linked securities before it was wound down in 2019 “in an orderly and common process,” Apollo said in an emailed statement.
Read More: Apollo Accused in Lawsuit of Illegal Human Life Wagering Scheme
“We believe these claims to be baseless and the suit’s description of Apollo’s historic activities within the life settlements market to be a gross mischaracterization,” the statement said.
The lawsuit, filed by the estate of Martha Barotz, says Apollo is “carrying out a widespread fraudulent human life wagering conspiracy” while funneling the proceeds of illegal life insurance policies through a web of shell entities run by a secretive affiliate, Financial Credit Investment.
The Barotz policy paid out $5 million after she died in 2018, according to the court complaint. The policy allegedly originated in 2006 when Barotz, then in her 70s, agreed to let an enterprise called Life Accumulation Trust III take out the policy in exchange for a payment equaling 3% of the death benefit. LATIII sold the policy to FCI in 2011, the suit says.
Read More: Matt Levine’s Money Stuff: Apollo Had Some Death Bets
The case in Delaware’s Chancery Court stems from earlier litigation between the Barotz estate and the Apollo-linked trusts, along with the estate’s subsequent attempts to collect on the nearly $7 million judgment it won, according to the April 26 complaint.
Apollo stressed Wednesday that the earlier lawsuit, filed in 2020, didn’t allege any wrongdoing on the asset manager’s part and that the presiding judge didn’t find any. The judge ruled only that the original issuance of the policy in 2006 was improper, Apollo said.
One of the law firms leading the litigation “has a cottage-industry practice of challenging life settlements all over the United States,” including some in which FCI has an interest, according to the statement. “The defendants in those cases have largely been successful in defeating this law firm’s claims,” Apollo said.
The lawsuit also targets affiliates of
The Barotz estate is represented by Donald L. Gouge Jr. of Wilmington, Del., and Cozen O’Connor. Apollo, Wells Fargo, and Wilmington Savings haven’t yet made court appearances.
The case is Estate of Martha Barotz v. Wilmington Savs. Fund Soc. FSB, Del. Ch., No. 2024-0447, 5/1/24.
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