A federal judge has said an investment management company can sue the insurance giant in state court for allegedly lying about its subprime mortgage exposure during the financial crisis
A federal judge has okayed a California lawsuit by Pacific Investment Management Co that accuses American International Group – better known as AIG – of lying about its subprime mortgage exposure prior to its 2008 bailout, according to a Reuters report.
U.S. District Judge Paul Crotty said that a California state court could handle the litigation, Reuters reported. AIG wanted Crotty to decide whether Pimco had waited too long to sue.
AIG spomesman Jon Diat told Reuters that the insurer disagreed with the judge’s decision.
In March of 2015, AIG got court approval for a $970.5 million class-action settlement over its esposure to subprime mortgages and credit default swaps, Reuters reported. That exposure resulted in AIG requiring $182.3 billion in federal bailout money.
Pimco decided to opt out of the settlement, hoping to recover more by suing on its own, Reuters reported. It sued AIG in a California state court. AIG in turn sued Pimco, seeking a declaratory judgment that the investment manager had waited too long to sue, Reuters reported.
But Crotty decided that a California state court could make that decision.
“After extensive litigation, it is clear that Pimco’s chosen forum (where it is headquartered) is suitable for the resolution of the dispute,” Crotty wrote in his decision.
U.S. District Judge Paul Crotty said that a California state court could handle the litigation, Reuters reported. AIG wanted Crotty to decide whether Pimco had waited too long to sue.
AIG spomesman Jon Diat told Reuters that the insurer disagreed with the judge’s decision.
In March of 2015, AIG got court approval for a $970.5 million class-action settlement over its esposure to subprime mortgages and credit default swaps, Reuters reported. That exposure resulted in AIG requiring $182.3 billion in federal bailout money.
Pimco decided to opt out of the settlement, hoping to recover more by suing on its own, Reuters reported. It sued AIG in a California state court. AIG in turn sued Pimco, seeking a declaratory judgment that the investment manager had waited too long to sue, Reuters reported.
But Crotty decided that a California state court could make that decision.
“After extensive litigation, it is clear that Pimco’s chosen forum (where it is headquartered) is suitable for the resolution of the dispute,” Crotty wrote in his decision.
