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Member, Beacon International Group, Ltd.
NEW YORK—Lonsdale L.L.C. has won an arbitration award of more than $86 million in a breach-of-contract dispute with AIG, according to arbitration documents.
The legal dispute concerned a complex deal tied to the market for life insurance policies.
Lonsdale, a unit of the Brussels-based bank KBC Group N.V., alleged that New York-based American International Group Inc.’s Lexington Insurance Co. unit broke a promise to provide coverage for loans that were not repaid.
Lexington alleged that Lonsdale misrepresented and intentionally concealed important information about the nature of the life insurance policies that backed the loans.
However, members of an American Arbitration Assn. panel ruled 2-1 on April 12 in favor of Lonsdale and awarded more than $86 million.
AIG declined comment.
Other recent litigation
Lawyers for New York-based AIG have been busy lately.
For example, AIG in recent weeks said AIG Financial Products Corp. had sued investment advisory firm ICP Asset Management L.L.C. and others after losing more than $350 million in connection with collateralized debt obligations.
In addition, Liberty Mutual Group Inc. in April challenged a settlement between AIG and seven other insurers over alleged underreporting of workers compensation premiums by AIG.