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Suit disallowed


WILMINGTON, Del.—A Delaware Chancery Court judge ruled last week that American International Group Inc. head Martin J. Sullivan cannot be sued at this time by the AIG's former top officer, Maurice R. Greenberg, in a complex dispute related to the insurer's former relationship with C.V. Starr & Co.

The judge, Vice Chancellor Leo E. Strine, also granted C.V. Starr--where Mr. Greenberg now is chairman and chief executive--permission to file a cross-claim and seek possible contributions from AIG in the event plaintiffs prevail in their claims against C.V. Starr, a source familiar with the matter said.

In denying Mr. Greenberg's motion to countersue Mr. Sullivan or other current senior officers and outside directors, the judge did leave open the possibility for Mr. Greenberg to pursue such a claim after a final judgment in the underlying dispute, the source said.

Mr. Greenberg's bid to countersue arose from a 2002 shareholder derivative suit filed by the Teachers Retirement System of Louisiana, which charged that AIG officials improperly benefited from millions of dollars of commissions paid to entities controlled by Mr. Greenberg through C.V. Starr of New York.

C.V. Starr for many years produced business for AIG, but the companies have had a contentious relationship since Mr. Greenberg left AIG in 2005.

In January 2006, the plaintiff agreed to drop 15 current and former AIG directors and officers--including Mr. Sullivan--from the derivative suit, though it continued against Mr. Greenberg, former AIG Chief Financial Officer Howard I. Smith, former AIG director Edward E. Matthews and C.V. Starr itself.

In their bid to countersue, the defendants argued that current AIG CEO Mr. Sullivan and other AIG executives were more instrumental in determining C.V. Starr's commissions and were more to blame for any alleged wrongdoing.

A spokeswoman for Mr. Greenberg said: "We are delighted that the court granted C.V. Starr's motion to proceed against AIG."

A spokesman for AIG declined to comment.