Hurwitz, Sagarin, Slossberg & Knuff (HSSK), with co-counsel Kobre & Kim, filed a response to AIG Financial Product’s bankruptcy filing on behalf of 46 former employees who participated in AIGFP’s deferred compensation plans and previously filed a lawsuit in Connecticut seeking to recoup their money.
The response previews the plaintiffs’ intent to move to dismiss the Chapter 11 case as having been filed in bad faith, as well as the plaintiffs’ position that AIG’s purported multi-billion dollar “loan” to AIGFP is actually disguised equity.
On behalf of the plaintiffs, HSSK and Kobre & Kim argued that AIG and AIGFP “are purporting to ‘reorganize’ an entity that does not operate as a going concern, has no business to rehabilitate, no direct employees, and no non-insider creditors other than a group of 46 former employees…who have asserted claims against AIGFP in a pending Connecticut state court litigation.”
Referring to a court order in the Connecticut litigation where AIGFP was scheduled to produce a number of key documents to the plaintiffs (the same day it commenced its bankruptcy action), the plaintiffs said that AIG and AIGFP are instead “now weaponizing the Bankruptcy Code in bad faith to try to (1) take advantage of the automatic stay of the Connecticut Action, (2) shield AIG, AIGFP and their executives from discovery and previously ordered disclosures, and (3) dilute the claims of the only non-insider unsecured creditors of AIGFP identified in the petition: AIGFP’s former employees.”
HSSK partners, David Slossberg and Kristen Zaehringer, serve as co-counsel to the plaintiffs in this case, assisted by associate Kyle Bechet.