NU Online News Service, April 27, 3:19 p.m. EDT

American International Group Inc. could be on the hook for total claims of perhaps $800 million or more involving profits on real estate deals involving AIG’s Global Real Estate unit, according to a lawsuit that could come to trial in New York as early as this summer.

The lawsuit was filed by Kevin Fitzpatrick, former head of the Global Real Estate unit.

His lawyer, Sean O’Shea, alleges in the lawsuit that Fitzpatrick’s 2001 employment contract grants him and his partners 10 percent of the profits on the sale of all AIG-owned properties.

He says the monies owed are not compensation but “carried interest” of the type paid to officials of private-equity groups and hedge funds as incentives to maximize profits for investors.

O’Shea says the employment contract clearly states that Fitzpatrick is owed $275 million to $300 million.

But Mark Herr, an AIG spokesman, denies AIG owes the money. Herr says, “This is two-year-old litigation. We say his claims have no merit and he’s not entitled to the money he’s alleging he is owed.”

For his part, O’Shea says that it is unclear what the total value is of claims of other Global Real Estate unit employees and outside investors, but did not deny that the number could total more than $800 million.

He says another suit has been filed by Frank Behm, former head of AIG Global Real Estate in Asia, based in Japan.

Behm is no longer with the company, according to officials at AIG Global Real Estate in Manhattan.

The suit is currently scheduled for trial May 10 in federal district court in New York before Judge Richard Berman, but O’Shea says that a postponement is likely because lingering preliminary issues remain to be resolved.

Fitzpatrick alleges that beginning in October 2008, the month after it received a federal bailout to avert collapse, AIG violated the 2001 contract governing real estate profit distributions to him and some colleagues.

Fitzpatrick calls this alleged breach a factor in his March 2009 “resignation for good reason.”

But AIG in May 2009 labeled Fitzpatrick's departure a termination, accusing him of stealing “vast quantities” of confidential, proprietary information in the form of documents, computer drives and e-mails beginning in October 2008.

Judge Berman dismissed the AIG counterclaim in an opinion filed last September, and also rejected AIG’s efforts to have the Fitzpatrick suit dismissed.

At the time, Berman urged the two parties to settle the case.

O’Shea says there are no settlement talks underway.

The cases are Fitzpatrick et al v. American International Group Inc et al, and American International Group Inc et al v. Fitzpatrick, No. 10-00142.