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Greenberg aims to oust ‘biased’ judge

NEW YORK (Bloomberg) Maurice (Hank) Greenberg, the former American International Group Inc chief executive officer, claimed the judge presiding over a New York state lawsuit against him is biased and must step down from the case, according to court papers.

New York state Supreme Court Justice Charles Ramos's improper statements and reliance on inadmissible evidence require his recusal, Greenberg and his co-defendant Howard Smith, AIG's former chief financial officer, said in court papers dated yesterday.

Former New York Attorney General Eliot Spitzer filed the suit in 2005, accusing Greenberg and Smith of using sham transactions to distort New York-based AIG's reported financial condition. On March 1, an appeals court put on hold Ramos's plan to start a trial May 2. The Appellate Division, First Department, said it would hear appeal arguments in the case during the May term.

“The court has repeatedly demonstrated its intention to use improper and inadmissible evidence in adjudication of the case,” Greenberg's and Smith's lawyers say in support of recusal.

At a hearing last April, Ramos said the attorney general's office has put together “a devastating case”.

“I can see big problems with establishing a defence” to the state's claims about securities fraud, Ramos told David Boies, a lawyer for Greenberg.

The judge has called a deal with General Reinsurance Corp “a phantom transaction,” and has used the 2008 criminal conviction of former Gen Re CEO Ronald Ferguson to wrongly infer Greenberg must have acted improperly, according to defence lawyers. The judge's statements suggest a bias against the defendants, based on the fraud trial in Connecticut, the lawyers said. Neither Smith nor Greenberg was a defendant in that trial.

Eric Schneiderman, the current New York Attorney General, said in court papers the bias claim was “manufactured” on the eve of trial. The attorney general's office said Ramos has overseen the case for almost six years and has presided over about 33 hearings, decided 45 motions and supervised discovery involving 30 million pages of documents and more than 45 depositions.

“The only possible purpose of this frivolous motion can be to try to intimidate the court, before it presides over a hotly contested trial,” the New York Attorney General's office said.

AIG, based in New York and once the world's largest insurer, ousted Greenberg in March 2005, two months before Spitzer sued. Greenberg seeks to dismiss the claims. Spitzer dropped portions of the suit in 2006 that included four allegations tied to his investigation. The company settled with Spitzer and other regulators, agreeing to pay $1.64 billion, without admitting or denying wrongdoing.

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Published March 10, 2011 at 1:00 am (Updated March 10, 2011 at 8:47 am)

Greenberg aims to oust ‘biased’ judge

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