Claim and counter claim over AIG shares held by ex-boss
Troubled US giant AIG is suing former boss Maurice “Hank” Greenberg’s Starr group of companies to recover a block of AIG shares, Reuters reports
AIG is claiming breach of fiduciary duty. The firm held about 290 million shares at the time. It has sold about 80 million shares since, according to Reuters data.
The value of the shares held by Starr International was about $20bn in 2005, when it ceased to be a compensation vehicle for AIG executives. It is now run by Greenberg as a private investment vehicle and for charity.
AIG is seeking to win unsold shares worth about $270m at AIG's current stock price, as well as proceeds from stock sales since 2005.
A trial to settle the matter is scheduled to begin in Manhattan on Mar. 2.
"The trial will decide who is entitled to the large block of AIG stock ... Maurice Greenberg, the former AIG chief executive who misappropriated the stock when he left AIG four years ago under investigation for accounting fraud; or the current and future employees of AIG for whom the stock was put in trust nearly 40 years ago," said AIG's pretrial brief, prepared by law firm Paul, Weiss, Rifkind, and filed in Manhattan federal court.
Starr International is the original plaintiff, after filing a 2005 lawsuit against AIG to reclaim items that remained behind when Greenberg quit, including a collection of paintings by artists such as Vincent Van Gogh. AIG made a counterclaim for the stock.
"AIG, having dissipated its assets, now seeks to divert assets committed to charity so its top executives can take more undeserved bonuses," said Starr's lawyer Robert Silver, in an email responding to AIG's claims.
Another source reported: “We are reluctant litigants,'' said Lee Wolosky, the lawyer for Starr. “The Starr companies would like to get on with their lives but faced with the continuing harassment by AIG, we cannot do nothing.''
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