Suit claims Starr International improperly received 290M shares of AIG stock
American International Group Inc. and its former chairman and chief executive, Maurice “Hank” Greenberg, have a court date today related to a fight over a block of AIG shares that was sold for $4.3 billion.
American International Group Inc. and its former chairman and chief executive, Maurice “Hank” Greenberg, have a court date today related to a fight over a block of AIG shares that was sold for $4.3 billion.
New York-based AIG claims that Mr. Greenberg’s firm, Starr International Co. of Hamilton, Bermuda, improperly took a 290-million-share block of AIG stock when Mr. Greenberg was pushed out of the insurer’s C-suite in 2005.
Those shares were used to pay AIG executives until his ouster amid an infamous accounting scandal.
That year, Starr sold the stock for $4.3 billion.
The central issue of the case is who, in fact, owned the shares.
AIG argues that the shares had been held in trust since 1970, that Starr was the trustee, and that the stock was intended for the compensation of the insurer’s employees. Although the trust agreement was unwritten, according to court documents, AIG claims that it should get the proceeds of the stock sale.
Starr argues that the trust was never created.
A jury in the U.S. District Court for the Southern District of New York will give an advisory opinion on whether Starr indeed created the trust for AIG’s benefit and on whether Starr breached its fiduciary duty, according to court documents.
Although Mr. Greenberg isn’t a defendant in the case, he is scheduled to appear as a witness in the trial.
AIG spokesman Mark Herr didn’t immediately return a phone call seeking comment.
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