Hank Greenberg, the former CEO of American International Group Inc. (AIG), is headed to court on Tuesday to argue for the dismissal of a lawsuit against him.
Former N.Y. Attorney General Eliot Spitzer first sued Greenberg, along with AIG’s former chief financial officer Howard Smith, in 2005, accusing the pair of using fake transactions to hide the insurance company’s financial woes. Current N.Y. AG Eric Schneiderman has pursued those charges, even as he dropped a claim for damages against Greenberg earlier this year.
The lawsuit claims that Greenberg “initiated, negotiated and approved” a transaction with General Re Corp., a unit of Berkshire Hathaway Inc., which increased AIG’s loss reserves by $500 million without transferring risk. The state also referenced a second transaction, with Capco Reinsurance Co., which concealed a $210 million AIG underwriting loss.
Greenberg’s lawyer, David Boies, told Thomson Reuters that he will tell N.Y.’s Court of Appeals that the state cannot pursue injunctive relief because it did not include that claim in the initial case before the trial court.
Greenberg has allies outside of his legal team as well. In a Wall Street Journal op-ed, former New York governors Mario Cuomo and George Pataki urged Schneiderman to drop the case against Greenberg, calling it “morally wrong.”
“Given all the critical issues at hand, and the attorney general office's limited resources, the futile pursuit of a dead-end case that should never have been brought isn't a worthwhile endeavor,” the op-ed says.
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