Ex-AIG Employees Might Sue Over Reduced Bonuses

By | March 15, 2010

Several former American International Group Inc. employees might sue the insurer after it gave them less retention bonus money than they should have received, their lawyers said Monday.

AIG is holding back $21 million from retention bonuses for current and former employees of its Financial Products unit. That unit nearly caused the insurer’s collapse in September 2008.

The insurer is asking former employees who are eligible for the payout what they earned after leaving AIG so it can reduce the retention bonus payments by that amount, said Gary Phelan, a partner at law firm Outten & Golden, which represents eight current and former employees.

“They have asked them a series of questions, explaining that this part of their due diligence,” Phelan said. “But those same questions have been asked and answered before already.”

“They’ve had several months to determine whether or not any payment should be offset,” Phelan said. “Unless there’s a very quick payment made of the balance 25 percent, I think (a lawsuit) is inevitable.”

Andrew Goodstadt, a partner at Thompson Wigdor & Gilly, which is representing about a dozen current and former employees, said they were also considering all options.

AIG declined to comment.

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