American International Group (
AIG) has failed to persuade a California court to dismiss a lawsuit from Pacific Investment Management Co. (Pimco) relating to losses sustained during the 2008 financial crisis.
Bloomberg reports Judge Thierry Patrick Colaw of Orange County Superior Court rejected the argument made by AIG that Pimco, a unit of
Allianz, waited too long to initiate legal action over the claim it was misled on AIG’s subprime mortgage exposure prior to 2008.
However, the judge ruled AIG can immediately appeal the decision, noting that federal courts in similar cases have come to differing conclusions over time limits.
Pimco is attempting to recoup losses suffered by 63 investment funds, including its flagship Pimco Total Return, relating to stocks and bonds purchased between 2006 and 2008. AIG is accused of misstating or omitting crucial information relating to its level of exposure to subprime mortgages and credit default swaps.
Pimco sued AIG last year after opting out of a USD$970.5 million class-action settlement between the insurer and other investors.
“We respectfully disagree with the decision but are pleased that the trial court has agreed to certify an appeal in which we will argue that the more recent and better-reasoned decisions of the federal courts of appeal should be followed,” AIG said in a statement.
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