American International Group Inc. (AIG) sued the former chief executive officer of its International Lease Finance Corp. aircraft lending business, saying he stole confidential information when he left the company and started Air Lease Corp. (AL)
AIG filed a complaint yesterday in Los Angeles Superior Court accusing Steven Udvar-Hazy and 10 other former International Lease Finance executives of breach of fiduciary duty and stealing trade secrets, among other claims, when they left the company in 2010. AIG seeks to recover “several hundreds of millions” of dollars, according to the complaint.
“We regret having to file this suit, but the defendants’ misconduct left us no choice but to go to court to protect our rights and the rights of our shareholders, including our largest shareholder, the American taxpayer,” Mark Herr, a spokesman for New York-based AIG, said in an e-mailed statement.
AIG said Udvar-Hazy tried to buy all or part of International Lease Finance, the Los Angeles-based company he started in 1973 and sold to AIG in 1990 for $1.3 billion. AIG was soliciting bids for International Lease Finance in 2008 when the insurer needed to raise capital to repay an $85 billion U.S. government loan, according to the complaint.
Fleet of Planes
Udvar-Hazy couldn’t reach an agreement in January 2010 to buy a fleet of planes from International Lease Finance to start his business because he wouldn’t be allowed to solicit other executives or use confidential data, according to AIG’s complaint. He “resigned from ILFC, and then stole what ILFC refused to sell,” according to the complaint.
Among the trade secrets AIG says the former executives stole were leased aircraft valuation summaries, terms sheets and contracts of dozens of leases, the “sin list” of customer payment history, and lease agreements some of these executives were actively working on.
Air Lease said in a statement that International Lease Finance resorted to filing a lawsuit because it hasn’t been able to compete and perceives Air Lease as a growing threat. International Lease Finance has “struggled with an aging fleet, heavy debt load, and loss of talent,” Air Lease said.
Herr said in a follow-up statement that Air Lease’s allegations were “spurious” and a “smoke screen to distract attention from it illegal conduct.”
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