AIG v Hank Greenberg judge rules out raking over the past
The judge in the $4.3bn (£2.6bn) AIG v Hank Greenberg case has ruled out evidence about AIG’s bailout and bonuses, papers report
"This is a case about an alleged trust and an alleged conversion of valuable shares," Judge Jed Rakoff said. "It's not a forum for airing all of the innumerable other issues, most of which are resolved, regarding Mr Greenberg, Starr, AIG bonuses, investigations and what have you,” the Independent reports.
Greenberg was forced out of AIG in 2005 in an accounting scandal. Before 2005, Starr's holdings of AIG shares had been used to pay bonuses to retiring executives, and AIG says the company is an in-house trust. It accuses Greenberg of stealing $4.3bn from the company when Starr sold 290 million shares in the months after his resignation. If it wins the case, it is promising to use the proceeds to pay back the US Treasury.
Greenberg disagrees that AIG is a beneficiary of Starr, and says AIG made up the claim after Starr sued to get back $15m of artwork in AIG offices.
Reuters adds that the stock was worth $20bn in 2005 when Greenberg was ousted from AIG, but tumbled in value as AIG shares dropped over the last year.
Greenberg's departure not allowed too
The judge also ruled out discussion of the investigation by then-New York Attorney General Eliot Spitzer and a parallel probe by AIG that resulted in Greenberg's ousting as CEO in 2005.
The case is Starr International Company Inc v American International Group Inc 05-6283 in US District Court for the Southern District of New York (Manhattan).
