Apollo, BlackRock deny pressuring law firm Kirkland in Optimum lawsuit

By Mike Scarcella

WASHINGTON, March 26 (Reuters) - Apollo Capital Management, BlackRock Financial Management and six other major asset managers have denied pressuring law firm Kirkland & Ellis to drop Optimum Communications as a client in retaliation for a lawsuit that accused them of colluding to block Optimum from refinancing billions of dollars in debt.

In a court filing on Wednesday in federal court in Manhattan, Apollo and the other asset managers rejected claims by Optimum that they interfered with the company's relationship with Kirkland, one of the country's largest and most profitable law firms.

Optimum, formerly Altice USA, sued Apollo and other asset managers last year, claiming the firms formed a “cooperative” that controls nearly all of its outstanding loans and bonds, effectively locking the company out of the U.S. leveraged-finance market.

Optimum’s lawsuit was amended in February to allege the asset managers bullied Kirkland to drop Optimum over its lawsuit. The amended lawsuit said Apollo and the other asset managers leveraged their substantial business with Kirkland to pressure it into withdrawing as Optimum's transaction counsel in January.

The asset managers' new filing was part of their broader effort to dismiss Optimum’s lawsuit, which they called an improper effort “to weaponize the antitrust laws” to extract concessions on roughly $23 billion in debt.

The defendants said Optimum's complaint "lacks a factual basis to implicate each defendant in Kirkland's resignation.” The companies also said Optimum failed to show how each defendant allegedly interfered with the Kirkland-Optimum relationship.

Apollo and BlackRock did not immediately respond to requests for comment. Kirkland, which is not a defendant in the lawsuit, also did not immediately respond to a request for comment.

In a statement, Optimum said it "remains confident in the merits of its claims and will respond through the legal process."

Kirkland’s relationship with Optimum has no bearing on the antitrust claims, the asset managers said in their motion to dismiss the case.

“Kirkland is a sophisticated law firm with the agency to exercise its own professional judgment as to how to manage its responsibilities to clients who become actual or potential adverse parties,” they said.

The lawsuit has attracted significant industry interest. Five major financial industry trade groups — including the Securities Industry and Financial Markets Association — filed a court brief on Wednesday backing the asset managers’ effort to dismiss Optimum’s lawsuit.

They warned in the filing that casting doubt on cooperation agreements would introduce uncertainty into the negotiation of new credit agreements, leading to increased legal fees, longer negotiation timelines, additional transaction costs and deals delayed or forestalled entirely.

The case is Optimum Communications et al v. Apollo Capital Management et al, U.S. District Court, Southern District of New York, No. 1:25-cv-09785-JAV.

For plaintiffs: Joshua Branson and David Schwarz of Kellogg, Hansen, Todd, Figel & Frederick

For defendants: Robert Giuffra Jr, Renata Hesse and Kyle Mach of Sullivan & Cromwell