AIG issues new law suit against former chief executive

by Gill Montia

Story link: AIG issues new law suit against former chief executive

American International Group (AIG), the world’s biggest insurance company, has issued a new law suit against its founder and former chief executive, Maurice Greenberg.

AIG is alleging that Mr Greenberg and six other former AIG employees “misappropriated” shares valued at $20 billion.

Howard Smith, AIG’s former chief financial officer, is among those accused.

The case centres around the insurer’s subsidiary, Starr International, which held a substantial number of AIG shares to protect it against hostile takeover bids.

The defendants were members of Starr’s board and are alleged to have caused or participated in the removal of AIG managers from Starr’s board, leaving the defendants in full control of the company.

The suit alleges that Mr Greenberg, who now controls Starr, plans to use his position “to start a venture capital and private equity firm to make investments in Eastern Europe”.

An AIG spokesman said: “This new action is really a protective action to preserve our freestanding claims against these individuals personally.”

The defendants in the case have apparently refused to sign an agreement stopping a three-year statute of limitations on claims, and according the AIG this refusal has forced the group “to file these claims now”.