As summer ends, I’ve been tracking a very Wall Street row concerning (what else?) compensation. The fascinating legal battle, now entering its second decade, pits AIG Financial Products—the derivatives-hedging subsidiary of AIG, the insurance behemoth with a market value of nearly $50 billion these days—against 46 of its former executives who helped gut the financial system back in 2008 by underwriting and selling highly controversial insurance products. The former executives are seeking some $500 million in deferred compensation, including damages, for their hard work, which wound up costing taxpayers a cool $185 billion in bailouts. 

The group has filed lawsuits in both the U.K. and Connecticut, where AIGFP is headquartered. In 2022, AIGFP, which is still a wholly owned subsidiary of AIG, filed for bankruptcy protection in Delaware, ostensibly to avoid paying the executives the money they are demanding. It’s as crazy as it sounds, and the litigation is ongoing in Delaware bankruptcy court, where the former employees are now seeking their deferred cash. (The Connecticut litigation has been stayed, given the AIGFP bankruptcy filing.)