(Bloomberg) -- Former American International Group Inc. ChairmanMaurice “Hank” Greenberg lost his bid to toss a decade-old fraudsuit by New York’s attorney general, clearing the way for trialunless he appeals to the state’s highest court.

New York Attorney General Eric Schneiderman, who took over thecase, claims Greenberg was responsible for sham transactions withGeneral Reinsurance Corp. in 2000 and 2001 that inflated AIG’s lossreserves by $500 million.

A trial had been scheduled to start in February but was delayedas Greenberg sought to have the case thrown out. A New York stateappeals court Thursday sent the case back for trial.

“We look forward to presenting the people’s case at trial,” LizDeBold, a spokeswoman for Schneiderman, said in a statement. SteveAiello, a spokesman for Greenberg, said he hasn’t made a decisionyet whether to appeal.

Greenberg said New York’s pursuit of the case is a waste oftaxpayer money and that the suit has “fallen apart” since it wasfiled by then-Attorney General Eliot Spitzer in 2005. Hissuccessors have been forced to abandon some claims, includingdamages, leaving only a case seeking “meaningless and duplicativerelief,” Greenberg said in court filings.

Greenberg stepped down as AIG’s chief executive officer in March2005, the same month the New York-based insurer said thetransaction with Gen Re were improper.

Schneiderman is seeking disgorgement of cash bonuses received byGreenberg and wants to bar him from participating in the securitiesindustry or serving as an officer or director of a publiccompany.

The case is State of New York v. Greenberg, 401720-2005, NewYork State Supreme Court, New York County (Manhattan).

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