The downfall of Leon Black

One thing to start: JAB Holding is replacing its longtime chief Olivier Goudet with Joachim Creus, a 47-year-old lawyer who has worked with the group since 2010 and who has already been designated as the successor to the European investment group’s chair Peter Harf. 

Apollo, Leon Black and the #MeToo era

New York City cops must complete a special course before they join the section of the force that investigates sexual assaults. A handbook for law enforcement in the state advises that “rape is not about sex, it is about power”. 

Still, only last year, the US Department of Justice opened an investigation into allegations that the New York Police Department “sham[ed] and abus[ed]” survivors of sexual violence, instead of properly investigating their reports.

With cops in disrepute, some of the city’s enterprising lawyers have proposed an alternative path to justice. It’s based on a pioneering law passed in 2000, which allows complainants of sexual violence to sue their attackers in civil court — even if their allegations aren’t taken up by prosecutors working for the Manhattan district attorney.

Douglas Wigdor was among the first lawyers to invoke the statute. He says he has secured more than $1.5bn in compensation for clients, including some who were assaulted by the disgraced Hollywood mogul Harvey Weinstein.

Criminal prosecutions are run by publicly accountable officials, and the public can watch the wheels of justice grind in open court. It’s harder to scrutinise the alternative path to justice held out by plaintiffs’ lawyers. 

Many cases end in large payouts before a claim is ever filed in court. Others, like the lawsuit that Wigdor filed this month against music mogul Sean Combs, are only glimpsed in public. The plaintiff was Cassie, the R&B singer, who alleged that Combs had abused her. Combs denied the allegations. The day after Cassie’s suit was filed, Wigdor announced that she and Combs had resolved the claims “to their mutual satisfaction”.

This week’s FT Weekend Magazine cover story written by DD’s Mark Vandevelde has the inside track on Wigdor’s legal war against Leon Black, once the most powerful man on Wall Street. In 2021, Wigdor filed a lawsuit against Black on behalf of Guzel Ganieva, a Russian fashion model who claimed that the billionaire had mistreated her and damaged her reputation by accusing her of extortion. 

Black denies the allegations. He quit as chief executive of Apollo Global Management soon after they became public.

It looked like another parable of the #MeToo era, with an appearance from Jeffrey Epstein and an NDA signed at the Four Seasons restaurant in New York.

But somehow, New York’s legal system has transmuted one woman’s allegations of sexual violence into a noisy argument over the reputations of two men.

How a powerful US bankruptcy judge fell on his sword

Even big-time corporate lawyers who charge $2,000 per hour need a confidence boost every once in a while.

The world of blockbuster bankruptcies has been transfixed by the saga of David R Jones, the powerful judge in Houston who presided over many of the biggest Chapter 11 cases of the past decade, as DD’s Sujeet Indap chronicles in this Big Read.

Jones resigned from his plum post in October just days after news outlets broke stories about his romantic relationship with Liz Freeman, a prominent lawyer who appeared in his court. Jones and Freeman failed to disclose their personal entanglement to other parties in cases, a likely obvious violation of legal and ethical standards. 

Jones became popular with big-time bankruptcy advisers due to his work ethic and willingness to quickly push through cases. But he also wielded a personal touch. “He made us look good in front of our CEO clients and also the junior lawyers on our team,” said one star lawyer who explained how Jones was often effusive in his praise of the oral arguments and written briefs that were offered in his court. 

Jones happened to have approved more than $13mn in case fees to the law firm Jackson Walker in the time Freeman worked there between 2018 and 2022. The US bankruptcy code has strict requirements for professionals who get paid by the debtor and must share any possible connections that might compromise their work or judgment. 

Jackson Walker now says that its retention applications — which require detailed disclosure of potential conflicts of interest — were incorrect in more than 25 cases in large part because Freeman had misled them about the nature of her relationship with Jones.

Now, the US Department of Justice is seeking to vacate all the fees that Jackson Walker earned in Freeman’s cases, while the firm seems ready to put up a fight by pinning the misconduct on Freeman alone. 

There are many shoes left to drop as parties in the various relevant cases going back years decide how they want to proceed. There’s also the question of who knew about the relationship between Jones and Freeman but opted to keep their mouths shut.

OpenAI’s Silicon Valley soap opera

It’s hard to top the tale of Sam Bankman-Fried’s collapsed crypto empire in terms of made-for-TV fodder, from a fraud conviction to missing billions to a Bahamian penthouse polycule. But Silicon Valley’s latest drama could give it a run for its money.

On Wednesday, news broke that Sam Altman will return to the helm of OpenAI, the artificial intelligence powerhouse he co-founded — and was fired from less than a week ago.

The tech founder will return under the supervision of a new board that includes former Salesforce CEO Bret Taylor as chair, former US Treasury secretary Larry Summers, and Quora chief Adam D’Angelo — the only remaining member of the original board that fired him.

Why D’Angelo and his former board colleagues sacked Altman in the first place has been a source of constant confusion and employee frustration, with OpenAI’s board saying only that he had not been “consistently candid”.

It has also placed a spotlight on the ChatGPT maker’s convoluted corporate structure.

OpenAI’s board isn’t built to serve the interests of investors. It’s a non-profit foundation committed to guarding humanity’s best interests when it comes to AI.

The ensuing chaos, however, suggests it may not be a good idea to put so much power in the hands of a few individuals even if they claim to be operating on a solid set of morals.

The big question now is whether investors will get the sort of valuation that OpenAI was reaching before all the drama ensued.

Job moves

• Kirkland & Ellis intellectual property partner John Patten has left to join Paul, Weiss, Rifkind, Wharton & Garrison in London, the latest in a wave of high-profile poachings by the New York firm from its US rival.

• Evercore has named former Goldman Sachs senior banker Stephen Withnell as a senior adviser focused on metals, materials and mining.

• Marathon Asset Management has hired Blackstone’s Alex Howell as head of European alternative credit.

• Clayton, Dubilier & Rice has named John Stegeman as an operating adviser. He was previously CEO of construction supplies group White Cap.

• Alternative asset manager ICG has appointed BC Partners’ Stelios Elia as a London-based managing director focused on European telecoms, media and technology coverage.

• White & Case has promoted 23 lawyers to local partner and 22 to counsel.

Smart reads

Party’s over From a performance by South Korean pop star Psy to a parade of Fortune 500 CEOs, McKinsey’s Seoul soirée last month made the consultancy look like one big party. But things are far less cheery behind the scenes, Bloomberg reports.

Legacy on trial Private equity boss Kneeland Youngblood has accused ConocoPhillips of depriving his ancestors, who were freed slaves, of oil riches from their Texas land — setting the scene for a $900mn court battle, The Wall Street Journal reports.

Making the best of it As dealmaking in China slows, Hong Kong’s top investment bankers have been left with more time to enjoy their riches, but also a lingering fear of lay-offs, Bloomberg writes.

News round-up

UK government ‘minded’ to probe Telegraph deal over Abu Dhabi links (FT)

UBS chief Sergio Ermotti calls for tougher sanctions on negligent bankers (FT)

Evergrande chair’s 2 luxury mansions seized by creditor (Nikkei Asia)

European Commission fines Rabobank €26.6mn over bond trading cartel (FT)

Hedge fund short sellers suffer $43bn of losses in market rally (FT)

Activist investors pile pressure on Ladbrokes owner Entain (FT)

Innovative banks eye hot new opportunity: corporate loans (FT)