(Bloomberg) ? Maurice "Hank" Greenberg, the ousted chief executive officer of American International Group Inc., may be willing to negotiate with New York Attorney General Eliot Spitzer to settle a fraud lawsuit, one of Greenberg's lawyers said. "If a reasonable resolution could be reached without litigation, that's obviously in everybody's interest," said attorney David Boies in a July 1 interview. "I think there will be some serious settlement discussions."

The comments mark a retreat for Greenberg, 80, from his insistence in May, when Spitzer filed the suit, that he would contest the allegations. In a May 26 statement, Greenberg's lawyers said they would "vigorously defend" the case and "respond in due course, denying any fraudulent conduct."

The civil suit accuses Greenberg, who ran New-York-based AIG for almost 40 years, of misleading regulators and investors by using sham reinsurance contracts and other improper accounting to understate liabilities and inflate underwriting income at the world's largest insurer.

Greenberg still disputes the allegations, Boies said, pointing out that many settlements are reached without the defendants admitting wrongdoing. He also said it's unlikely that Spitzer would criminally indict Greenberg because his suit covers "civil issues, not criminal issues." He then added that "you never want to predict what regulators or prosecutors will do."

Spitzer spokesman Darren Dopp wasn't available to comment. Boies didn't rule out a comprehensive settlement that also resolved investigations by the US Securities and Exchange Commission and the Department of Justice, though "even a partial settlement may be something that makes sense."

He said it was too early to say what constituted a "reasonable" settlement and he didn't know when settlement talks might begin. AIG, which was also named in the suit, has restated five years of earnings, lowering net income by $3.9 billion, or ten percent. AIG shares are down 20 percent since the company said it had received subpoenas on February 14, and the company has said it aims to settle the Spitzer suit. Shares of AIG advanced 51 cents to $58.61 in New York Stock Exchange composite trading on July 1.