Jury sides with Greenberg in AIG case
A US jury has sided with former AIG CEO Maurice “Hank” Greenberg in a $US4.3 billion ($5.5 billion) lawsuit brought by his former company.
The Manhattan jury last week ruled his company Starr International owes no liability to AIG over shares allegedly meant for an executive compensation scheme.
But US District Judge Jed Rakoff has yet to determine a final ruling on whether Mr Greenberg breached his fiduciary duty in diverting the funds. The jury verdict is advisory, with a final ruling due in August.
Starr had been set up years earlier as an investment vehicle for senior managers and became AIG’s largest shareholder. It was taken over by Mr Greenberg and six other former executives following his departure from AIG four years ago.
AIG sued the company and Mr Greenberg as its CEO, alleging he had a fiduciary duty to use the acquired AIG stock to fund a deferred employee compensation plan established around 1970. Instead Starr had retained the shares and sold many of them.
Mr Greenberg testified that AIG agreed to suspend the compensation plan in 2005 and appoint a charitable trust as beneficiary.
The AIG case was hampered by a lack of written evidence, with lawyers instead relying on video evidence to try to prove that Mr Greenberg knew the shares were trust-protected.
A Starr spokesman claimed the verdict was a “complete vindication” of the company and Mr Greenberg.
The Manhattan jury last week ruled his company Starr International owes no liability to AIG over shares allegedly meant for an executive compensation scheme.
But US District Judge Jed Rakoff has yet to determine a final ruling on whether Mr Greenberg breached his fiduciary duty in diverting the funds. The jury verdict is advisory, with a final ruling due in August.
Starr had been set up years earlier as an investment vehicle for senior managers and became AIG’s largest shareholder. It was taken over by Mr Greenberg and six other former executives following his departure from AIG four years ago.
AIG sued the company and Mr Greenberg as its CEO, alleging he had a fiduciary duty to use the acquired AIG stock to fund a deferred employee compensation plan established around 1970. Instead Starr had retained the shares and sold many of them.
Mr Greenberg testified that AIG agreed to suspend the compensation plan in 2005 and appoint a charitable trust as beneficiary.
The AIG case was hampered by a lack of written evidence, with lawyers instead relying on video evidence to try to prove that Mr Greenberg knew the shares were trust-protected.
A Starr spokesman claimed the verdict was a “complete vindication” of the company and Mr Greenberg.