Ba'al's claim as founder of the Baali line is disputed by a number of sources. See the following links for more information on the subject:
Originally a young boy, the being that would became Ba'al was a slave in the Second City, embraced as the eldest childe of an Antediluvian, that conscripted itself to the forces of Outer Darkness. In doing so, the devil-child took on something of the place Beyond, becoming something more – and less – than human. Gathering apostles from the ranks of his brethren, the first shaitan of Baal-called-Destroyer marshaled his armies and laid siege to the Second City; Blood met Blood as Caine's childer fought one another amidst razed ruins and flame-swept plains.
At length, it is whispered, the progenitor himself turned his attention to the fray – a terrible cataclysmic time in which the skies rained fire and wept blood. The battle ended as abruptly as it had begun; the 12 al'shaitani were put to death, and their demonic hordes were routed. Of the boy-thing, however, there was no sign..
Younger Baali often think that Ba'al is the demonic overlord the bloodline pays service. The truth in this matter, however, is that Ba'al is a semitic title that simply means "lord", a title often attributed to local city gods and god-kings in the Levant and Asia Minor during ancient times. The men of Mesopotamia use the term Ba'al to hide the true names of their gods from foreigners, in order to prevent their enemies from wooing away their gods favor. Also, the name itself serves as a symbol of power; a person who only refers to himself as "Lord" will be addressed by other with this name, whether they like it or not. This may be the origin of the name Ba'al in context with the Fourth Generation vampire who revolted.
There is unofficial material that was removed from the final version of Clanbook: Assamite Revised that presents a different point of view. According to the excerpt, ancient texts retrieved from the Vault of Pillars regarding an ancient 4th generation Assamite tell the chilling tale of it's embrace. Archeologists believe that Cainite to be ur-Shulgi,
It is said that the childe of Haqim (a young shepherd, no more than 10 years old), was possessed by a powerful demon after it was deliberately thrown by his own sire in the sacrificial pit that spawned the original Baali. The demonic influence allied with the cainite's powerful blood were enough to unite the infernalists during the Baali Wars, and launch a massive assault that nearly conquered the Second City. Haqim eventually defeated his own childe and performed an exorcism to tear the demon out of the body that it rode.
Some fans speculate that this demon might have been in fact Ba'al the Destroyer himself, and that the "seed of evil" that somehow persisted inside its host (even after the exorcism performed by Haqim), could be a fragment of the demon. According to this theory, Ba'al might act directly in the modern nights through the body of ur-Shulgi.