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NEW YORKC.V. Starr & Co. Chairman and Chief Executive Officer Maurice R. Greenberg last week was cleared of wrongdoing by an independent body investigating accusations that he and other executors of the estate of Cornelius Vander Starr breached their fiduciary duties in a decades-old sale of certain assets.
In 2005, then-New York Attorney General Eliot Spitzer outlined the allegations against Mr. Greenberg and three other Starr estate executors in a 26-page report that focused on three transactions done from 1969 to 1970.
In each transaction, Mr. Spitzer alleged, the executors breached their fiduciary duties to the Starr estateand to the New York-based Starr Foundationby selling assets of the estate "for far less than their actual value." Mr. Spitzer's report stated that that the executors improperly enriched themselves through the deals and deprived Starr Foundation of assets that would now be worth more than $6 billion (BI, Dec. 19, 2005).
In addition, Mr. Spitzer sent a letter to Florence A. Davis, president of the New York-based charity foundation that was formed by Mr. Starr, urging her to take action regarding the allegedly suspect transactions.
An independent Starr Foundation committee commenced on Jan. 31, 2006, to investigate the attorney general's claims.
Results of that review were published in a 174-page report released last week, which found that Mr. Greenberg and the other executors "acted in good faith and prudently performed their duties, and that there is no basis for the (attorney general) report's contention to the contrary."
Given the findings of the review, "the independent committee does not consider it appropriate to pursue the litigation remedies suggested or to reconstitute the foundation's board of directors or structure," the report stated.
Mr. Spitzer had suggested that the foundation attempt to recover its allegedly lost assets in court, among other things.
A spokesman for New York Attorney General Andrew Cuomo said, "This office is not surprised that a foundation controlled by Mr. Greenberg has issued a report attempting to absolve him of wrongdoing."
Founded in 1955, Starr Foundation has $3.3 billion in assets.