Nothing much ever seems to go right for the American International Group ( AIG) these days, huh?

If it's a day that ends in "y," it's probably a day with bad news for the company, and Tuesday's dark cloud took the form of a court defeat for AIG in its battle against former CEO Maurice "Hank" Greenberg.

The federal jury in Manhattan found that an investment firm, Starr International, which is controlled by Greenberg, did not have to reimburse AIG for $4.3 billion in shares taken from a company retirement bonus fund in 2005, shortly after Greenberg was ousted as CEO.

Shares of the insurer plunged 16% to $13.64 in afternoon trading, weighed down by the ruling and a market still reeling from last week's not-so-good 1-to-20 stock split.

U.S. District Judge Jed S. Rakoff said he would issue a final ruling in the Greenberg case by the end of August -- but the jury's quick four-hour deliberation could mean bad news for AIG when Rakoff makes his decision.

AIG is trying to reclaim money it says was wrongly pocketed through stock sales by Greenberg. AIG claims Greenberg breached his fiduciary responsibility by misappropriating shares held in trust by Starr for AIG's deferred-compensation program.

AIG said if the judge ruled in its favor it would use any proceeds to help repay its $180 billion bailout from the government.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

If you liked this article you might like

Downgraded AIG Isn't Finished Falling

Downgraded AIG Isn't Finished Falling

Former AIG CEO Greenberg Can Pursue Defamation Suit Against Spitzer

How to Make Easy Money on Apple's iPhone X Worldwide Reveal: Market Recon

Hurricanes Irma and Harvey Might Cost $100 Billion, Dealing Big Blow to Insurers