On Thursday, former AIG Chief Maurice “Hank” Greenberg and three other AIG executives settled a derivative action pending in Delaware for $115 million. As reported by the WSJ, the lawsuit involved the relationship AIG had with an insurance firm that Mr. Greenberg heads, C.V. Starr & Co., which underwrote some of AIG’s business and was scheduled to go to trial on Monday. It accused the men of improperly diverting more than $1 billion from AIG to C.V. Starr, where they also served as officers and received compensation.
Most of the settlement is being paid by the defendants’ insurance policies as directors and officers, with $29.5 million is being paid by the defendants. A lawyer for Mr. Greenberg emphasized that Greenberg will not be making any settlement payments from his own pocket. The lawyer stated that the “arrangements Mr. Greenberg presided over while at AIG were not only proper, but contributed to AIG’s growth into the largest and most successful insurance company in the world.”
Grant & Eisnhofer’s Stuart Grant, a lawyer for the plaintiffs, said in a statement: “This is a hugely important settlement for shareholders, one that not only returns some of C.V. Starr’s ill-gotten profits to AIG shareholders, but also advances critical corporate governance goals.”
