AIG billion dollar suit begins
Maurice R. “Hank” Greenberg, American International Group’s (AIG) former chief executive, took the stand Tuesday afternoon in a long-running dispute over control of a block of shares held by Starr International Co.
Greenberg, who was forced out as the insurer’s top executive in 2005, is a key witness in a legal clash between Starr International, or SICO, and AIG over millions of AIG shares held by the one-time sister company to AIG.
“That is the stock the parties are feuding about?” asked Ted Wells, a lawyer for AIG, referring to shares that went to SICO in 1970 as part of a reorganization of AIG and its affiliates.
“Apparently,” said Greenberg, dressed in a charcoal grey suit and pink tie.
AIG has sued SICO for $4.3 billion in damages – representing the sale of tens of millions AIG shares since Greenberg left the insurer – and the return of more than 185 million shares SICO controls.
The jury trial is being heard in U.S. District Court in Manhattan and is expected to last a month. Greenberg, who is SICO’s chairman, could be on the stand for a lengthy period of time. AIG claims the shares were set aside in a trust to fund a deferred compensation plan for a select group of AIG executives and were improperly diverted by SICO and its management. About 1% of the company’s employees and executives participated in the incentive plan.
SICO’s lawyers have said the shares were placed aside for a number of purposes, including protecting AIG from a takeover bid, to go to charity if SICO were liquidated and to fund other projects. The decision on whether to fund the compensation program lied with SICO’s voting shareholders, which include Greenberg.
“If the people do well, the company does well and SICO does well,” Greenberg said during his testimony Tuesday.
WSJ
6/16/9
Magnolia Tribune
