A Delaware court has given preliminary approval to a $115 million settlement in a shareholder derivative action brought by the Teachers’ Retirement System of Louisiana against four former
AIG executives and C.V. Starr & Co. The Defendants from AIG included former CEO Hank Greenberg, former CFO Howard Smith, former director Edward E. Matthews and former Senior Vice Chairman Thomas Tizzio. Of the $115 million settlement, Greenberg, Smith and Matthews and their directors’ and officers’ liability insurers will pay $85.5 million; $28.25 million will be paid by C.V. Starr & Co., Inc.; and Tizzio will pay $1.25 million. As you may know, Greenberg is now chairman of C.V. Starr. When he left AIG there were lots of questions over corporate accounting methods.
It was alleged in the Louisiana pension fund lawsuit, which was filed in 2002 that the AIG executives engaged in self-dealing in certain transactions with C.V. Starr. The teachers’ fund alleged that the former directors and executive officers of AIG breached their fiduciary duties to the company and to its shareholders, and that defendant C.V. Starr & Co., Inc. aided and
abetted those alleged breaches of fiduciary duty. Defendants continue to deny all allegations of wrongdoing and liability. A final hearing on the settlement will be held on December 17th in Delware.
Source: Insurance Journal
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