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Cuomo Rejected Hank Greenberg's Attempts to Settle Lawsuit

Posted on 16 Apr 2010

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New York Attorney General Andrew Cuomo rejected attempts to settle a lawsuit against Maurice "Hank" Greenberg, said a lawyer for the former American International Group Inc. chief executive officer.

New York officials haven't been willing to rekindle settlement talks after an initial proposal fell apart following AIG's 2008 near-collapse, said David Boies, chairman of Boies, Schiller & Flexner LLP. Greenberg, 84, who ran AIG for 38 years until he was forced to retire in 2005, is accused of using sham transactions to hide losses and inflate reserves at the New York-based insurer. He has denied wrongdoing.

“We’ve proposed to get a respected neutral, a former judge, to get a negotiated resolution,” Boies said yesterday in a phone interview. “We’ve been unable to get the attorney general’s office to be willing to do that. When you have a situation where they won’t listen to anybody, they’ll simply make a demand and sit on that demand, there’s no resolution.”

Richard Bamberger, a spokesman for Cuomo’s office, called the information provided by Boies “inaccurate.”

“We will not comment about this ongoing matter,” Bamberger said in an e-mail.

Former New York Attorney General Eliot Spitzer sued Greenberg in 2005, alleging he and former Chief Financial Officer Howard Smith misled regulators and investors. Spitzer dropped portions of the suit in 2006 and Greenberg asked a court to dismiss the rest. Cuomo inherited the case.