American Insurance Group (AIG) and one of its ex-executives, Kevin Fitzpatrick, have reached a settlement deal over his $274 million lawsuit against the insurer. Fitzpatrick, the former president of the AIG Global Real Estate Investment Corp. unit, claims that his then-employer would not pay him during the 2008 economic crisis. The insurer’s refusal to pay occurred not long after the US government said yes to the first part of what would turn into a $182 billion bailout.
Fitzpatrick, who worked for AIG for 22 years, said that AIG breached agreements it had with him and entities under his control. He claims the agreements entitled him to a share of profits made on the insurer’s real estate investments but that on October 2008 AIG stopped paying him and others who were entitled to profit distributions. Fitzpatrick then quit.
Fitzpatrick sued in 2009, claiming that AIG owed him $274 million and that he wanted interest and punitive damages, which is right around the time that the insurer was trying to get past public disapproval over $165 million in bonuses that were paid to employees in the AIG Financial Products unit. That is the group that handled the complex financial instruments that led to its huge losses.
AIG denied wrongdoing and said that Fitzpatrick was paid what he was owed. The insurer contended that Fitzpatrick actually was fired and that he stole data that was confidential and belonged to the company.
In other AIG-related news, a district court judge just threw out a shareholder lawsuit accusing Bank of America (BAC) of not telling them that the insurer was planning to sue the bank with a $10 billion fraud lawsuit. AIG accused Bank of America of misrepresenting the quality of more than $28 million of MBSs that AIG bought from the latter and its Countrywide and Merrill Lynch (MER) units.
Also, there are reports that AIG might file mortgage-backed securities case against Morgan Stanley (MS) over $3.7 billion of MBS.
Former AIG Real Estate Executive Settles $274 Million Pay Case, Businessweek, November 6, 2013
Morgan Stanley Says AIG May Sue Over Mortgage-Linked Investments, Bloomberg, November 4, 2013
Bank of America wins dismissal of lawsuit on AIG disclosures, Reuters, November 4, 2013
AIG Sued by Its Own Executive as Tragedy Turns to Farce, CBS, December 10, 2009
More Blog Posts:
Judge Dismisses Shareholder Lawsuit Suing Bank of America For Allegedly Concealing AIG Fraud Case, Institutional Investor Securities Blog, November 6, 2013
Stakeholders With $55M Securities Fraud Case Against Government Over AIG Bailout Get Class Action Certification, Institutional Investor Securities Blog, March 19, 2013
AIG Wants to Stop Former CEO Greenberg From Naming It as a Defendant in Derivatives Lawsuit Against the US, Stockbroker Fraud Blog, April 13, 2013
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