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A group of former employees at American International Group Inc. won a U.K. court ruling that may pave the way for them to be paid $100 million in bonuses dating back to the financial crisis.

The 23 former traders, analysts and managers at the London branch of ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Management France SA and ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Financial Products are demanding bonuses they say were promised even as the crisis unfurled. Judge Andrew Baker said in his ruling Friday that ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP broke its contracts with its staff and that a further trial would assess the size of damages.

The total payout could be greater than the $108 million at stake, the judge said, noting that that there were potentially almost 300 eligible staff.

In 2007 and 2008, ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP struggled with liquidity after the unit almost brought down the company with money-losing derivative bets backing subprime mortgages. The U.S. saved ÌìÃÀÍøÕ¾´«Ã½´«Ã½ in a rescue that then-Federal Reserve Chairman Ben Bernanke said made him “more angry” than any other measure the government took to counter the financial crisis.

In order to prevent staff from jumping ship, ÌìÃÀÍøÕ¾´«Ã½´«Ã½ implemented awards plans to “protect participants from the effect of potential losses on ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s multi-sector collateralized debt obligation portfolio, and at the same time to “lock them into” ÌìÃÀÍøÕ¾´«Ã½´«Ã½ by promising substantial payments,” lawyers for the claimants said in a court filing.

The plans provided for “a sharing of the risks and rewards,” according to court filings. This meant that if ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP sustained a loss, compensation accounts would be hurt.

Still the contracts, which deferred the payouts, couldn’t have anticipated the crisis that befell ÌìÃÀÍøÕ¾´«Ã½´«Ã½, the judge said. Even as ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP realized losses totaling $40 billion in late 2008, the judge said that “the language required for the restoration of payments.”

The judge said the claims would be limited to ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP and couldn’t be brought against ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Inc.

While the decisions as to what was going to be paid out were probably made by ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s Ed Liddy, acting as “CEO of everything,” Baker said he didn’t believe that the parent company caused the ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP unit to break the contracts.

An ÌìÃÀÍøÕ¾´«Ã½´«Ã½ spokesman said the company plans to appeal the judge’s finding on the ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP contracts with staff, adding: “We look forward to presenting our case on why no damages are warranted given the massive losses suffered by ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP.”

The second trial is slated to begin in October 2019.

The case is Tobias Gruber & Ors v. ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Management France, SA & Anr, High Court of Justice, Queen’s Bench Division, case no. CL-2014-000921.

Related:

• Former ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Financial Product Staffers Seek Bonuses They Say They Were Promised
• Ex-CEO for ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Unit Tells UK Court Politics Not Why Bonuses Were Cut
• ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Sued by Ex-Derivatives Staff Who Claim Denial of $100M in Bonuses

Topics Legislation ÌìÃÀÍøÕ¾´«Ã½´«Ã½