News Currents

Judges fault Spitzer on case against Greenberg over charity funds

One of Eliot Spitzer’s more contentious cases from his years as attorney general in New York was criticized by a panel of retired judges who discounted his claims that insurance executive Maurice R. “Hank” Greenberg cost his mentor’s charity $6 billion.

In 2005, Spitzer accused Greenberg of participating in financial transactions 35 years earlier. Spitzer said Greenberg’s conflicts of interests hurt the foundation that provides money to colleges while benefiting Greenberg and his company, American International Group Inc.

Spitzer criticized Greenberg’s role as executor of the estate of his mentor, Cornelius Vander Starr, who created a worldwide network of insurance companies including AIG in the early 1900s. Spitzer’s claimed the foundation could take civil action to recover $6 billion owed it from decisions made by Greenberg.

“Executors (of the Estate of C.V. Starr) acted in good faith and prudently performed their duties, and … there is no basis for the A.G. report’s contention to the contrary,” according to the panel’s report. “The independent committee has concluded that it would not be appropriate, nor would it be in the best interests of The Starr Foundation, to pursue any litigation or other course of action against the executors, whether in their capacity as executors or as directors of The Starr Foundation.”

The foundation’s board of directors created the panel of retired judges and Florence Davis, president of the foundation.

Insurer not liable in Conn.’s Avon Mountain crash

A federal judge has ruled that the insurance company for a Bloomfield trucking company involved in a fiery fatal crash on Avon mountain does not have to pay victims and families of those killed.

The ruling involves American Crushing and Recycling’s insurance carrier, Acadia Insurance Co. of Westbrook, Maine. A dump truck owned by American Crushing went out of control while heading down Avon Mountain on July 29, 2005, and slammed into 19 other vehicles. The fiery crash killed four people and injured 10 others. Those killed included the truck’s driver.

U.S. District Judge Janet Bond Arterton ruled that American Crushing’s dump truck was not insured at the time of the crash. The ruling means Acadia keeps $3 million in liability coverage.

The ruling allows victims to file claims against their own insurance company, according to one attorney. “By having the judge’s ruling it makes it easier for them to prevail on their own uninsured motorists claims because it establishes conclusively that there was no insurance,” Acadia attorney Charles Vermette said.

Acadia issued a $2 million umbrella policy and a $1 million automobile policy from Sept. 1, 2004 to Sept. 1, 2005, but American Crushing owner David Wilcox’s wife canceled the auto policy on 12 of its dump trucks before the fatal crash and received $39,976 refund credit from Acadia, according to the ruling.