Settlement negotiations between lawyers representing former AIG chief Hank Greenberg and the New York Attorney General are at a stalemate as both sides continue to bicker over how best to describe actions that led to a civil lawsuit charging Greenberg with accounting fraud while he was CEO of the insurance giant, people with knowledge of the matter say.
Greenberg is also balking at the common language that goes with civil regulatory settlements, that the target "neither admits or denies wrongdoing," said person close to Greenberg who added that Greenberg believes that such a statement is "equal to admitting guilt."
A spokesman for Greenberg had no comment.
People with knowledge of the matter say Cuomo's office is seeking a large fine from Greenberg, possibly as much as $100 million or more to bring an end to the three-year-old case, originally filed by former New York AG Eliot Spitzer.
But the sticking point isn’t money—it’s how the final settlement agreement will read, these people say. Greenberg is looking for a deal where the final settlement eliminates or greatly diminishes his culpability in the alleged actions described in the suit alleging that he committed accounting fraud by covering up losses and pumping up reserves at AIG .
One person close to the case describes a possible settlement deal as "50-50" given the tone of the recent negotiations. If a deal isn’t worked out soon, the AG’s office plans to take Greenberg’s deposition some time this month, these people say.