An article in the Financial Times this past week details an ongoing legal battle in New York involving private equity firm Apollo Global Management — a major investor in Athene USA’s parent Athene Holding Ltd. — and Caldera Holdings, a competing private equity firm started by former Apollo board member Imran Siddiqui. 

Apollo and Caldera have been in a legal tug of war over efforts by Caldera to acquire an annuity company to jump-start an insurance operation to compete with Athene, which bases its annuity operations in West Des Moines. The acquisition target they both reportedly were seeking was West Des Moines-based American Equity Investment Life Holding Co. 

In the most recent round of lawsuits filed in what has been described as “a circular firing squad,” Siddiqui and his partner in Caldera, former Athene executive Stephen Cernich, are seeking $1.5 billion in damages against Athene and Apollo. 

Their suit accuses Apollo and Athene officials of “disparaging Caldera in the marketplace, issuing commercial and legal threats to those doing or considering business,” which they say scared off a potential investor in the failed American Equity acquisition. 

Apollo has alleged in multiple court cases that Siddiqui was using confidential information obtained from his time at Apollo to benefit his new company. 

In April, an arbitrator in New York gave Apollo a partial victory by ordering Siddiqui to pay Apollo $75,000 in damages and another $150,000 for not returning or destroying some of the firm’s confidential documents. Another former Apollo principal, Ming Dang, was ordered to pay $1 million in damages for secretly working for Siddiqui and taking confidential information while still employed with Apollo. 

On June 7, American Equity announced that its “board of directors is no longer in discussions regarding a possible transaction,” after having confirmed a year earlier it was considering a possible sale or merger. 

A column that same day published in ThinkAdvisor, titled “American Equity’s mysterious suitor,” pieced together evidence that American Equity was the likely target of both Apollo and Caldera. 

“The real story isn’t about Caldera and Apollo legal posturing,” wrote Michael Jay Markey Jr., a Michigan adviser and owner of Legacy Financial Network. “It’s how American Equity had no choice but to announce it was exploring a sale, even though selling wasn’t the company’s intent, and despite the unlikeliness the transaction would be completed.” 

An Aug. 20 Financial Times article named American Equity as the acquisition target. But by this time neither suitor was still in the market for the company. 

“Athene eventually walked away from AEL [American Equity], deciding a deal would be too expensive,” according to the Financial Times. ”But Mr. Siddiqui could not buy the company either. The Apollo legal action spooked his potential backers, according to people familiar with the discussions.” 

Apollo’s suit was never really about confidential information, Caldera co-founder Cernich told the Times. “It was about the fact that we had the audacity to go after Apollo’s income and would not back down from its threats,” he said.    

Meanwhile, Caldera is still seeking an annuity company to buy to kick-start its operations and investors to fund it, according to the Times. 

The dictionary defines a caldera as the crater left after a large volcano eruption. At least for now, it seems like an apt name for the company.