The past few years have been hard on bailed-out insurance giant American International Group Inc. (AIG). Adding to its already full plate of hassles is a lawsuit it filed yesterday against Los Angeles billionaire Steven Udvar-Házy, the former head of its International Lease Finance Corp. (ILFC) aircraft leasing business, which it purchased from Udvar-Házy in 1990.
AIG claims that Udvar-Hazy stole company secrets, customers and business deals after he started his current, rival company, Air Lease Corp. (ALC) in 2010. The insurer also named the rival leasing firm and 30 employees who left ILFC along with Udvar-Házy to work at the new business as defendants in the lawsuit.
According to the suit, AIG contends that the defendants connected 16 flash drives to ILFC computers and copied about 13,000 files that included aircraft fleet price data, contract information, letters of intent and statements of work.
According to the Los Angeles Times, the relationship between Udvar-Házy and AIG went south when the insurer took bailout money from the Troubled Asset Relief Program in 2008, which gave the federal government control of the company and its subsidiaries, including ILFC. After unsuccessful attempts to repurchase ILFC from AIG, Udvar-Házy bailed out on the leasing business and immediately formed ALC, using contacts he had made over his many years in the business.
“After Udvar-Hazy resigned and started ALC, several of these ILFC executives, who ultimately joined ALC, worked in conjunction with Udvar-Hazy to divert lucrative deals with ILFC's customers to ALC,” AIG wrote in the lawsuit. “They did so while sitting at their ILFC desks, earning ILFC paychecks, and owing undivided loyalties to ILFC.”
ALC, however, says the suit is baseless. It contends that after AIG’s financial collapse, ILFC has struggled with an aging fleet, heavy debt load and loss of talent, and has failed to complete a planned IPO.
“[W]hile AIG/ILFC wastes its time in court, Air Lease—under the leadership of Steve Udvar-Házy, one of the most influential figures in the aircraft leasing industry—will continue to focus on providing the best products and services for airlines worldwide,” ALC said in a statement.
For more, read the Los Angeles Times.