NEW YORK (Reuters) – Efforts to settle a long-running fraud lawsuit against American International Group Inc’s (AIG.N: Quote, Profile, Research, Stock Buzz)former chief, Maurice "Hank" Greenberg, have broken down amid theinsurer’s financial woes, a lawyer from the New York attorney general’soffice said on Monday.
Before AIG’s near collapse in mid-September, which led to a federalbailout, the parties had "reached a settlement," David Ellenhorn, anattorney from New York Attorney General Andrew Cuomo’s office, said ata court hearing.
But then, "AIG went from $20-$30 (per share) to $2-$1 (per share), and unfortunately the deal didn’t happen." Ellenhorn said.
Ellenhorn spoke at a status conference on the civil lawsuit beforeNew York Supreme Court Justice Charles Ramos, who gave lawyers for thestate and for Greenberg until April 30, 2009 to complete depositions ofwitnesses.
"We are getting all the depositions and documents we are entitled toin order to defend the case," Greenberg’s attorney, Nicholas Gravante,said after the court conference.
The lawsuit was brought by former New York Attorney General EliotSpitzer as part of an accounting probe of AIG that led to Greenbergleaving the company in 2005. AIG reached a $1.64 billion settlementwith authorities in 2006.
Much of Greenberg’s wealth is tied up in AIG stock through personal holdings, a family trust and companies he controls.
The U.S. government now owns nearly 80 percent of AIG as the resultof its $85 billion rescue of the insurance holding company inSeptember. This month, AIG and the government announced a revised planthat boosted the amount of aid to as much as $150 billion.
Greenberg, now chairman and CEO of C.V. Starr & Co Inc, haspublicly criticized the AIG management and board of directors thatfollowed him for the insurance giant’s problems.
(Reporting by Grant McCool; editing by Jeffrey Benkoe)
? Thomson Reuters 2008 All rights reserved
Feeling stuck in self-doubt?
Stop trying to fix yourself and start embracing who you are. Join the free 7-day self-discovery challenge and learn how to transform negative emotions into personal growth.
