Down...But Not Out

Greenberg's board members, some of them old friends and people whose institutions had benefited from his charitable largesse, stuck by their CEO as long as they could. But when the firm's accountants said they might not certify the company's finances because they didn't have confidence in the leadership, the board moved to protect the company and ousted Greenberg.

Across town from his old office, Greenberg is far from finished. He's trim and fit. People who stay in touch with him say he's reading a lot--he's about halfway through The Da Vinci Code--and that he feels in these trying times that his family has grown closer. Son Jeffrey, the former CEO of insurance broker Marsh & McLennan, ran into his own legal problems last year and resigned after Spitzer charged that he steered business to favored clients. Son Evan remains CEO of insurer Ace.

Did Greenberg cross one line too many with AIG's books? Some say his combative tone back in February so raised the New York AG's hackles that it precipitated much of his current trouble. Now Greenberg, who hasn't given an inch in 80 years, is lawyered up and digging in--for a battle that will make or break his legacy.