AIG, Greenberg agree to settle all legal disputesPosted On: Nov. 25, 2009 12:00 AM CST
NEW YORK—American International Group Inc. and former AIG executives Maurice R. Greenberg and Howard I. Smith have agreed to settle all pending legal disputes, AIG said in a statement.
New York-based AIG said Wednesday that the agreement resolves all current disputes between the company and Mr. Greenberg—who was the insurer's longtime chairman and chief executive officer—and Mr. Smith, who served as chief financial officer. The agreement also encompasses claims from and against C.V. Starr & Co. Inc. and Starr International Inc., two former AIG affiliates now controlled by Mr. Greenberg.
Under terms of the settlement, the parties agreed to release each other from all claims, including any made by Messrs. Greenberg and Smith for indemnification of future legal fees and expenses or settlement costs, AIG said. Among the disputes covered by the agreement was a $1 billion derivative lawsuit AIG filed against Messrs. Greenberg and Smith.
Messrs. Greenberg and Smith also will submit claims for past legal fees and expenses to an independent third party, who will determine how much of those AIG is legally obligated to pay under its charter and by-laws and Delaware law, up to a cap of $150 million.
Among other provisions in the agreement, AIG will give Mr. Greenberg “reasonable access” to AIG's archives to write his memoirs, according to documents filed with the Securities and Exchange Commission Wednesday.
The agreement also calls for certain personal property to be returned to Mr. Greenberg, including photographs of him and AIG founder Cornelius Vander Starr, photos of Mr. Greenberg with Chinese leaders in AIG's Shanghai building, a Persian rug from AIG's former headquarters, and “any other materials of a personal nature” that are still at AIG facilities.
AIG Chief Executive Officer Robert Benmosche said in a statement: “We are pleased that we have resolved our differences. The resolution of these long-running disputes will remove a significant distraction and expense and allow AIG to better focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders.”
In the statement, Mr. Greenberg said: “I too am pleased that these long-running disputes are now over, and I want to express my appreciation for Bob Benmosche's help, and the help of the AIG board, in resolving them. I look forward to assisting AIG in trying to preserve and restore as much value as possible for all of AIG's stakeholders.”
AIG and Messrs. Greenberg and Smith had agreed in August to binding arbitration to resolve various legal disputes.