AIG Files to Try to Halt Ex-CEO's Access to Files

By Lilla Zuill

NEW YORK (Reuters) - American International Group Inc (AIG.N) filed a motion on Friday for a stay of a court order requiring it to turn over some internal documents to ex-Chief Executive Officer Maurice "Hank" Greenberg.

An appeals court ruled earlier this week that Greenberg should have access to the files, reversing a 2006 lower court decision that denied him and former Chief Financial Officer Howard Smith access to the documents.

The tussle over the documents is the latest chapter in Greenberg's fight with his former company since being forced out in 2005 following accusations of improper accounting leveled by then New York attorney general Eliot Spitzer and the U.S. Securities and Exchange Commission.

Greenberg's lawyer, Nicholas Gravante, said on Friday his client is fighting for access to the documents because they are important to clearing the former executive of fraud charges.

Greenberg and Smith are defendants in a civil case lodged by Spitzer in 2005, and have also been named in shareholder and derivative lawsuits filed after AIG in 2006 agreed to pay more than $1 billion to settle allegations.

In a memorandum of law to support the motion, filed in New York Supreme Court, AIG said it was "confident its position will be vindicated on appeal, and absent a stay, (it) would have to disclose its privileged documents to defendants before (its) appeal can be heard."

But Gravante, a partner at law firm Boies Schiller & Flexner, said any appeal by AIG would be frivolous and solely to delay the proceedings.

"It is unconscionable for AIG to further delay giving Mr. Greenberg the documents that he needs to clear his good name," Gravante added.

He said that, once given access to review the documents in question, he would move to have legal action against Greenberg dismissed.

NUMBER GAME

AIG, in a legal memorandum supporting its motion for a stay, said it had already handed over "well over a million pages" that relate to Greenberg and Smith's tenure and to a series of "the transactions at issue."

The transactions were scrutinized by lawmakers and regulators for having allegedly painted a falsely positive picture of AIG's financial results.

AIG said only 15 documents would have to be produced under the order earlier this week, but is appealing the requirement because they are privileged.

"There is not a single document of any significance to the transactions at issue here that has not already been produced to defendants," said AIG, in the legal memorandum.

AIG said none of the 15 documents relate to a finite reinsurance transaction with Gen Re, a reinsurance unit of Berkshire Hathaway Inc (BRKa.N)(BRKb.N).