Did Former AIG P.E. Heads Violate Non-Compete Clause?

American International Groupthinks so, and has filed a lawsuit in New York against former CEOPeter YuofAIG Capital Partnersand former general counselWilliam Jaroszfor violating the non-compete clauses in their termination agreements. Last April, the two were unceremoniously escorted out of the AIG offices, reportedly for protesting just a little too much against plans to spin-out the company' private equity unit, AIG Capital Partners, as a separate business.

They went their merry way, and together Yu and Jarosz founded theCartesian Capital Group, a New York-based private equity firm that AIG charges "directly competes" with AIGCP. It doesn't stop there, though, according to AIG. The insurance giant claims the two men used its "confidential and proprietary information," such as fund track records found on AIG computers, to help it raise money for two of its offerings,Pangaea FundandCartesian Capital Fund. While Yu and Jarosz haven't commented on that charge, the two toldPE周线that, since they were "terminated without cause," it "ended any non-compete obligations we might have had."