Maurice Greenberg arriving at a meeting for AIG’s board of directors in 2013. In background is David Boies, lead counsel for Greenberg. (AP/Mark Lennihan)
An attorney for former American International Group (AIG) boss Maurice “Hank” Greenberg said his client will deal with his latest loss in court the same way he has dealt with others in the long-running civil fraud matter: he will appeal.
In the wake of Wednesday’s decision by Manhattan Supreme Court Justice Charles Ramos refusing to dismiss the case against Greenberg, AIG’s former chief executive officer, and Howard Smith, the company’s former chief financial officer, the defense vowed to take the case to the Appellate Division, First Department.
“We plan to appeal the trial court’s denial of our motion for summary judgment,” David Boies, a name partner in Boies, Schiller & Flexner and counsel for Greenberg, said in a statement. “If that decision is reversed on appeal, this 10-year old action will be brought to a long overdue conclusion.”
The case, Ramos said, has been lingering for eight years, “meandering through a series of seemingly never-ending motions and appeals.” It has already been to the First Department, as well as the Court of Appeals, which last June declined to dismiss the matter and sent it back to Ramos for trial (NYLJ, June 26, 2013).
In the latest round, Greenberg and Smith asked Ramos to dismiss the case on a summary judgment motion similar to one they filed—and he rejected—four years ago. This time, the defendants challenged the attorney general’s authority to seek equitable remedies such as disgorgement and an injunction barring the defendants from the securities industry. The state had dropped its prior claim for damages in light of a $115 million federal court settlement in a parallel action (NYLJ, April 29, 2013).
“Defendants now move, again, for summary judgment, arguing that the Attorney General lacks standing to continue prosecution of this action for permanent injunctive relief,” Ramos said in People v. Greenberg, 401720/05. “Defendants’ motion is denied in its entirety. The guidance from the Court of Appeals could not be more clear that the Attorney General may proceed to trial seeking equitable relief.”
Matt Mittenthal, a spokesman for Attorney General Eric Schneiderman, said: “Now that the motion has been dismissed in its entirety, we look forward to moving toward a trial that will finally offer the opportunity to hold Mr. Greenberg accountable for his alleged role in a massive fraud.”
Greenberg and Smith have spent most of the past decade fighting charges initially brought in 2005 by then Attorney General Eliot Spitzer, who accused the defendants of perpetrating “fraudulent transactions designed to portray an unduly positive picture of AIG’s loss reserves and underwriting performance.”
Over the years, one or both of the defendants have filed dozens of motions and multiple summary judgment petitions, accused Ramos of bias and challenged his refusal to step aside, appealed virtually every adverse ruling and pursued ancillary matters, such as suing Spitzer for libel, orchestrating the filing of several different ethics complaints against Schneiderman and his staff and battling at length to obtain Spitzer’s private emails.
The brouhaha over Spitzer’s emails has gone on for seven years, with Smith demanding access, under the Freedom of Information Law (FOIL), to any private emails that Spitzer wrote regarding the case while he was in office.
For most of that time, Smith insisted that the current attorney general had an obligation to retrieve and then release any Spitzer emails responsive to his FOIL. However, Spitzer himself was not named in the case until the Appellate Division, Third Department held in October that the former attorney general, who has an obvious interest in the outcome, must be joined in the action (NYLJ, Oct. 18, 2013). Spitzer was finally joined in the case in January.
Last week, Spitzer signed an affidavit in which he said the Manhattan-based digital forensic firm of Stroz Friedberg had been retained to search his personal emails for any records responsive to the FOIL, and found nothing.
“I hereby certify that I do not have possession of any records responsive to [Smith's request] and that such records cannot be found after a diligent search,” Spitzer said in a sworn affidavit.
Spitzer is represented in the email matter by Andrew Celli, a partner with Emery Celli Brinckerhoff & Abady.
Earlier this month at a proceeding before Supreme Court Justice Christopher Cahill in Kingston, Celli offered to provide an affidavit from Spitzer in an effort to put the matter to rest. However, Smith’s attorney, Kaye Scholer partner Vincent Sama, has said that an affidavit may not end the dispute and reserved the right to press further if it did not contain sufficient detail (NYLJ, May 5, 2014).
Sama was not immediately available to comment on whether he and his client are satisfied with Spitzer’s May 22 affidavit.