By Jonathan Stempel
NEW YORK (Reuters) - Maurice "Hank" Greenberg, former chief executive of American International Group Inc <AIG.N>, may pursue large parts of his defamation lawsuit against former New York Attorney General Eliot Spitzer, a New York state appeals court ruled.
Wednesday's decision by the Appellate Division in Brooklyn, New York came seven months after Greenberg, 92, reached a $9 million settlement with Eric Schneiderman, the current state attorney general, of civil accounting fraud charges first brought by Spitzer in 2005.
The complaint "adequately stated that Spitzer acted with actual malice" in criticizing Greenberg, hoping to damage Greenberg's reputation and career while bolstering his own, Justice Cheryl Chambers wrote for a four-judge panel.
Greenberg and Spitzer were appealing a June 2014 lower court ruling letting Greenberg pursue part of his case.
The appeals court restored some claims that Greenberg brought against his longtime nemesis.
"I look forward to proving the truthfulness of all the statements I have made about Hank Greenberg's behavior as CEO of AIG," Spitzer said in an email. "A decade of legal obstructionism by Greenberg will not obscure the facts."
David Boies, Greenberg's longtime lawyer, said in an email: "We are, of course, pleased with the appellate court's decision, which will now permit Mr. Greenberg's claims to proceed to trial,"
The lawsuit arose from statements Spitzer made in television interviews in 2012 and a book, "Protecting Capitalism Case By Case," in 2013.
Greenberg said Spitzer falsely implicated him in fraud at AIG, and suggested he was "removed" or "thrown out" by the insurer's board because of his role, among other allegations.
The appeals court said Spitzer's background as attorney general could have left people "less skeptical" and "more willing" to believe him, including when he told then-CNBC anchor Maria Bartiromo that "Hank Greenberg at AIG committed fraud. The record on that is indisputable."
It said the lower court judge erred in dismissing claims over statements tying Greenberg's 2005 exit from AIG to fraud there, citing a lack of evidence of such a link.
AIG in 2006 paid $1.64 billion to settle regulatory probes of its business practices. Two years later, it received what became a $182.3 billion federal bailout.
In May, a federal appeals court said Greenberg's Starr International Co, a big AIG shareholder, had no legal right to challenge that bailout. Starr had sought more than $40 billion of damages for shareholders.
After serving as attorney general, Spitzer was New York's governor for 15 months. He resigned in 2008 after being linked to a high-end prostitution ring.
The case is Greenberg v Spitzer, New York State Supreme Court, Appellate Division, 2nd Department, No. 2014-07682.
(Reporting by Jonathan Stempel in New York; Additional reporting by Nate Raymond in Boston; Editing by Steve Orlofsky and Dan Grebler)