NU Associate Editor Mark E. Ruquet had a front-row seat for most of the trial pitting AIG versus its former CEO, Maurice "Hank" Greenberg, in a battle of the titans over a deferred compensation program. The way Mark sees it, the quick jury verdict shows this case came down to a matter of trust--as well as the lack of a "smoking gun" by the plaintiffs. Read on for his inside account and take on the trial.

Mark Ruquet's Take:

After Maurice “Hank” Greenberg got his win in court over American International Group, I gave some thought to the whirlwind of events and the surprising speed with which the jury came back with its verdict.

They really only had to answer one question—who do you trust? And yes, there is a double entendre here.

Did the jury trust Mr. Greenberg enough to tell the truth, or did they believe that a legal “trust” had been created between Starr International Company and AIG's select group of executives, whose hard work earned them select membership into the SICO deferred compensation program?

Mr. Greenberg came out on top of this one, and as objective as I was in my news coverage, I wasn't surprised. AIG never proved there was a bona fide contract showing that the program was created by AIG for AIG.

As incestuous as the management of the two companies obviously was--since the major leadership positions were occupied by individuals of both companies (most notably Mr. Greenberg serving in the chief executive post at both SICO and AIG)--the common corporate functions stopped there.

They were sister companies, both products of the same parent—C.V. Starr Insurance Company--but their purposes, as laid out brilliantly by Mr. Greenberg's attorney David Boies, were very different.

AIG is a public company designed to be an insurance provider (remember, it's the other stuff they got into—like credit default swaps on subprime mortgage-backed securities--that got them into trouble).

SICO is a private company whose foundation is AIG's stock. SICO made enough money back to allow it to share the wealth with others at AIG, and it did.

Try as he might, AIG's attorney, Theodore Wells, never produced the smoking gun showing SICO was obligated to continue funding AIG's deferred compensation program (an incentive bonus program intended by Mr. Greenberg and others to keep AIG executives in place because they lost their portion of shares if they left).

Try as he might, Mr. Wells just didn't have a case, and it seemed like there were times when he lost the jury.

The jurors sat through some excruciatingly boring testimony. At one point, with the jury out of the room, the judge discussed with the attorneys the inattentiveness of one juror who apparently fell asleep. However, they were treated to Mr. Greenberg more than holding his own in a grueling week on the witness stand.

Mr. Greenberg has a reputation for being a fierce manager, reportedly striking fear into any executive he would call. There is one story of him bringing a reporter to tears because he tore into her for asking a question in a way he didn't like.

That Hank Greenberg, however, was never on display in court, for the most part. He was charming and easy going with attorneys and staff who accompanied him. He and Mr. Boies took lunch together in the cafeteria, apparently never eating much.

During a pause in the trial, probably while the court waited for the jury to enter, I faintly overheard Mr. Greenberg discussing diets with the court reporter.

The only sign of impatience he exhibited was while he was on the witness stand being hammered by Mr. Wells.

His wife often appeared with him in court--a charming woman who is clearly attentive to her husband, making Hank a lucky man indeed. After the trial ended, she approached a reporter and complimented her on her matching choice of shawl and jacket.

For all the criticism Mr. Greenberg may receive, snobbery does not seem to be one to be hung on him.

We may not realize this, but one of the great equalizers is the Men's Room. A couple of times I ran into Mr. Greenberg, with Mr. Boies and Mr. Wells both there. Got a wink from Mr. Greenberg on one occasion and discussed the weather with Mr. Boies on another. Memorable stuff.

One final thought about the trial. It must have contributed to at least one section of the economy—office suppliers.

There was literally a small army of attorneys for both sides--five or six at each trial table and another group occupying seats in the public benches. Each attorney seemed to have access to two monitors before them. One appeared to produce the court transcript in real time, and the other for their personal use.

But despite the advances in technology, this was a paper war. One wall in the court room was lined with boxes filled with documents, and in two small offices outside of the court one could glimpse more boxes stacked up in neat rows.

However, the unsung heroes are the clerks who had to sort through all that material and introduce it into evidence, whether it was for display on an overhead projector, or pulling something out of storage. It is hard to know how they kept track, but they deserve a real pat on the back for their work.

Now, we wait for the final verdict from U.S. District Court Judge Jed S. Rakoff--a man with a raspy voice, quick wit, white hair and beard who probably is asked to stand in for Santa Claus on occasion.

Despite that jovial exterior, he is a strict disciplinarian with a fast temper who does not suffer fools lightly in his courtroom. One does not want to get on his wrong side, and there were times when AIG's attorney's almost seemed to cross that line.

He will take the jury's decision on the breech of trust issue under advisement, but if common folk so quickly walk away rendering a verdict in favor of SICO, won't that speak volumes to Judge Rakoff?

Special Reports /

Greenberg Vs. AIG Came Down To Trust

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