Tom Russo, who helped American International Group Inc. negotiate the end of its U.S. bailout, is retiring from his post as general counsel.
Russo, 72, will stay with the insurer until a replacement is found, Chief Executive Officer Peter Hancock said Tuesday in a message to employees. The general counsel has been with the New York-based insurer since 2010, saying at the time that he joined “for the challenge.”
Russo was the former top attorney at Lehman Brothers Holdings Inc. until the securities firm’s bankruptcy in 2008. He led negotiations with the Treasury Department and Federal Reserve Bank of New York to help then-CEO Robert Benmosche repay the $182.3 billion rescue. The lawyer also worked on asset sales and helped AIG navigate legal clashes with shareholders, Wall Street counterparties, regulators and ex-employees.
“Although I am pleased that he is ready to write a new chapter in his exciting professional life, on a personal level I will miss my friend and adviser,” Hancock said in the memo.
Under Russo, AIG negotiated a billion dollar deal with investors who accused the insurer of misleading them about risks related to subprime mortgages. He also won a settlement with Bank of America Corp. that helped reimburse the insurer more than $600 million for losses on home loans. And AIG resolved government probes into mortgage-insurance abuses, claims-paying lapses and ties to Cuba, a nation sanctioned by the U.S.
AIG also resolved a case filed by Duke University over claims tied to the school’s dispute with lacrosse team members falsely accused of sexually assaulting a stripper. The insurer had sold coverage to Duke.
One notable decision in his era was to avoid the courts: In 2013, Benmosche opted against joining ex-CEO Maurice “Hank” Greenberg in a lawsuit against the U.S. government regarding the bailout terms.
The general counsel started at AIG the same week as Hancock, an ex-J.P. Morgan & Co. executive who was hired to help manage risk. Hancock became CEO in 2014 and has reshaped management, naming a new chief financial officer, investing head and leader for commercial insurance.
Russo replaced Anastasia Kelly, who left AIG after a dispute about government-imposed limits on her own pay, people familiar with the matter said at the time. Between Lehman and AIG, he worked at law firm Patton Boggs LLP. He previously was at Cadwalader, Wickersham & Taft LLP and was an attorney at the U.S. Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission.