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Friday, September 3 2010

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• Greenberg Among 20 Former AIG Execs to Reach $150 Million Settlement in ... - Trading Markets (press release)

• Stanford D&O trial begins as Pendergest-Holt settles - The Insurance Insider (subscription)

• Market Reaction to Earnings from ACE Limited; ACE, BRK-A, AIG, CB - Learning Markets

• Motions to Dismiss Denied, Granted in Part in BofA/Merrill Merger Securities Suit

• AIG's Insurers Settle Derivative Action Against Greenberg

AIG's Insurers Settle Derivative Action Against Greenberg

Source: HR Topics

Posted on Aug 30, 2010 (4 days ago)

As reflected in their agreement filed on August 26, 2010, the parties to the New York and Delaware derivative actions involving former AIG CEO Maurice Greenberg, as well as certain other former AIG directors and officers, have agreed to settle the case for a payment to AIG by its D&O insurers of $90 million. The agreement also provides that the insurers will pay $60 million to Greenberg and Howard Smith, AIG’s former Chief Financial Officer, for their legal fees. The settlement is subject to the approval of Delaware Chancery Court Vice Chancellor Leo Strine. Jef Feeley and Hugh Son’s August 27, 2010 Bloomberg article about the settlement can be found here. This derivative lawsuit settlement follows AIG’s $725 settlement of a related securities class action lawsuit, and also follows the $115 million settlement in 2008 of a separate shareholders derivative lawsuit involving directors and officers of AIG. Background In 2004, the first of many separate shareholders derivative lawsuits (later consolidated) were filed in New York and in Delaware, against AIG as nominal defendant, and against numerous former AIG directors and officers, including Greenberg and Smith. The investors alleged that AIG insiders to misstated AIG’s financial performance in order to deceive investors about AIG’s financial condition. The centerpiece of the lawsuit was an allegedly fraudulent $500 million reinsurance transaction in which various AIG insiders staged an elaborate artificial transaction with Gen Re Corporation. The complaint also alleged AIG insiders allegedly used secret offshore subsidiaries to mask AIG losses, misstated accounts with no basis for their adjustments, failed to correct well-documented accounting problems in an AIG subsidiary, and hid AIG’s involvement in controversial insurance policies that involved betting on when elderly people would die. The complaint also related to alleged bid-rigging ...

Tags: tort,malpractice,liability,reform

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