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Jury finds against AIG in suit against Greenberg

 

Thursday, Jul 09,2009, 12:54:17 PM   Click:

NEW YORK_American International Group Inc. has lost a round in its court battle against former CEO Maurice "Hank" Greenberg.

In an advisory decision Tuesday, a federal jury found that an investment firm controlled by Greenberg did not have to reimburse AIG for shares taken from a company retirement bonus fund. The jury in U.S. District Court in Manhattan made its finding just hours after getting the case.

U.S. District Judge Jed S. Rakoff said he would issue a ruling in the case by the end of August.

The New York-based insurance giant had accused Greenberg, through a company called Starr International that he controls, of plundering an AIG retirement program composed of $4.3 billion in stock in 2005. The questions raised during the civil trial boiled down to who controlled the fund and what its purpose was.

AIG has received $182.5 billion in federal aid since last fall. It said it would use any proceeds from the trial to repay some of its loans from the government.

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