AIG Seeks Reversal of Golden Eagle Ruling

American International Group Inc. asked a California appeals court to reverse a lower court decision awarding the right to buy a financially troubled workers’ compensation insurer to a rival company. New York-based AIG, ranked by A.M. Best Co. as the fourth-largest provider of U.S. property and casualty insurance, in April agreed to pay more than $1 billion for Golden Eagle Insurance Co., California’s third-biggest workers’ compensation insurer. California Insurance Commissioner Chuck Quackenbush seized Golden Eagle on Jan. 31, citing inadequate reserves at the San Diego-based company. After conducting an auction, Quackenbush in April approved the purchase plan set forth by AIG. But AIG’s package needed approval from California Judge William Cahill, Quackenbush said. In late May, the judge awarded the right to buy Golden Eagle to Boston-based Liberty Mutual Equity Co. AIG, in a petition filed in state Court of Appeals last week, said it was unfairly shut out of the bidding.