Tuesday, Dec. 08, 2009

Greenberg vs. AIG

Before the economic crisis, the big scandal at insurance giant AIG was ex-CEO Hank Greenberg. During his 38 years at the helm, Greenberg built AIG into one of the nation's largest insurance companies, but in 2005 the company's board pushed him out amid an accounting scandal pursued by then New York attorney general Eliot Spitzer. Greenberg, still a major shareholder, did not go quietly. On CNBC and anywhere else he could get a platform, the octogenarian denounced the company's management. He also sued on a number of occasions, including earlier this year, claiming that in the run-up to the financial meltdown, AIG had misrepresented its financial health. For its part, AIG sued back and took to coolly referring to Greenberg as "certain former members of senior management." Then, over the summer, a thaw began when AIG's newest CEO said he thought Greenberg had worthwhile advice. By late November, the announcement had been made: AIG and Greenberg would stop attacking each other in the courts and the company would pay off some of its former executive's legal claims. It would also turn over certain personal items he had left behind when he was booted, including photographs and a Persian rug.