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 Justice Charles Ramos of New York state court on Tuesday ruled
against Greenberg's demand for a jury to hear the civil case brought
by the New York attorney general.
Earlier this month, a New York appeals court rejected Greenberg's
attempt to remove Ramos from the long-running case. Greenberg
claimed Ramos was biased against him and could not preside over a
fair trial.
Ramos ruled from the bench in the latest legal wrangling in the 2005
case that accuses Greenberg and the insurer's former chief financial
officer, Howard Smith, of orchestrating sham transactions at the
insurer to hide its financial condition.
A spokeswoman for Greenberg's lawyer, David Boies, declined to
comment on losing the bid for a jury.
Attorney Vincent Sama, who represents Smith, who also sought a jury
trial, said he may appeal the ruling.
Ramos also heard arguments by the executives' lawyers on their
motions to dismiss the case.
Boies said the lawsuit could not be pursued because Schneiderman no
longer had "a viable remedy."
New York Attorney General Eric Schneiderman, who inherited the case,
was forced to drop his claims for as much as $6 billion in damages
last year after a class action settlement between AIG shareholders
and the executives and others over the allegedly improper
accounting.
The attorney general is now seeking "ill-gotten gains" from
Greenberg's compensation, according to attorney David Ellenhorn, who
represents Schneiderman.
He also wants to bar the executives from serving as officers or
directors of public companies and from participating in the
securities business.
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Boies argued that Greenberg, 88, has no intention of engaging in the
securities business or in acting as a director or officer of a
public company.
Greenberg is the chairman and chief executive of the privately held
C.V. Starr & Co, which owns Starr Principal Holdings, a registered
security adviser. "He is controlling a company that is in the
securities business," Ellenhorn said.
Boies said Greenberg didn't participate in the management of Starr
Principal Holdings or its investment activity.
"That's nice, but it's not the whole picture," Ramos said. "It
sounds as if he's a control person...it opens the door to that
influence."
Still, Ramos did not rule on whether the lawsuit, which was
originally brought by former New York attorney general Eliot
Spitzer, should proceed to trial.
Greenberg led AIG for nearly four decades before he was ousted in
2005. The next year, AIG paid $1.64 billion to settle federal and
state probes into its business practices.
The case is People v Greenberg, et al, New York State Supreme Court,
New York County, No. 401720/2005.
(Reporting by Karen Freifeld; editing by Ken Wills)
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