updated 10/20/2006 6:41:07 PM ET 2006-10-20T22:41:07

Former New York Stock Exchange  Chairman Richard Grasso is determined to fight back against a ruling that he return millions of dollars of compensation, but his battle will be long and tough.

In a major setback for the former Big Board boss, New York Supreme Court Judge Charles Ramos ruled Thursday that Grasso must return some payments and interest he received during his tenure as chairman at the NYSE.

Grasso who ran the world’s largest stock exchange for eight years, was forced out in 2003 following a public outcry over his $187.5 million compensation package. He was sued by New York Attorney General Eliot Spitzer in 2004, who charged the package was excessive and violated state law.

Spitzer’s office said Thursday’s decision meant Grasso must return about $100 million.

Grasso Friday told Reuters he would appeal the ruling and remained optimistic.

“We are very confident in our case,” he said. “We are very confident that the ruling, on appeal to the appellate division, will be overturned.”

But the path ahead would in all likelihood be drawn out and difficult, legal experts said.

“What is next is a lot more litigation,” said Anthony Sabino, a law professor at St. John’s University. “It’s going to be quite awhile before this is resolved.”

Even Spitzer’s office said the battle was not over.

The ruling meant “we’re certainly far along to where we wanted to get. It doesn’t moot the trial that had been scheduled for this week and which Grasso delayed,” said Avi Schick, deputy counsel in the AG’s office and lead prosecutor in the suit.

Schick added that some parts of the lawsuit, namely whether Grasso received excessive compensation, were not addressed in Thursday’s ruling. There also remained about $30 million of salary paid to Grasso that Spitzer deems excessive and should also be returned.

The trial had been expected to begin next week, although Grasso in August asked for a delay because he objected to the judge’s decision to conduct it without a jury. It remains unclear if and when a trial will begin.

Schick told Reuters arguments on Grasso’s appeal are set to take place at the end of November.

In any case, the appeal is likely take a year or more, said Richard E. Brodsky, a Miami-based lawyer at Squire, Sanders & Dempsey L.L.P.

“The question will be whether or not the judge will go forward with the trial pending the appeal,” said Brodsky. “I’d be shocked if the judge doesn’t postpone the trial if the appeal is made.”

Grasso all along has said he refuses to settle. But Brodsky said a drawn out process would give him an incentive to yield.

“If he can settle for a nice amount of money he can live happily ever after,” he said. “If he were my client ... I’d impress on him the need to balance the need for vindication against the effect of living under the cloud of litigation.”

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