Starr Sues AIG for Millions

Jun 26, 2007, 01:00 ET from Boies, Schiller & Flexner LLP

    NEW YORK, June 26 /PRNewswire/ -- C.V. Starr & Co., Inc. ("C.V. Starr")
 today sued American International Group, Inc. ("AIG") for hundreds of
 millions of dollars in profits and benefits realized by AIG as a result of
 AIG's relationship with C.V. Starr during the 2000 to 2005 period. During
 that period, AIG's share of premiums from business generated by Starr
 subsidiaries exceeded $5 billion. Profits and benefits realized by AIG as a
 result of its relationship with C.V. Starr include, among other things,
 underwriting profits and investment income earned by AIG as a result of the
 insurance premiums generated by C.V. Starr during this period.
     C.V. Starr's cross-claim against AIG was brought as part of an ongoing
 lawsuit filed by the Teachers' Retirement System of Louisiana (the
 "Teachers Fund"). The Teachers' Fund suit alleges that certain transactions
 between C.V. Starr and AIG were unfair to AIG. On June 13, 2007, Vice
 Chancellor Leo Strine allowed C.V. Starr's claim against AIG to proceed.
     "We are pleased that this claim was allowed to proceed at this time,"
 said Lee Wolosky of Boies, Schiller & Flexner LLP, counsel to C.V. Starr.
     Wolosky also said: "At the appropriate time, we intend to take legal
 action against other persons who personally benefited from the C.V.
 Starr-AIG relationship."
     At the time of the disputed transactions, current AIG Chief Executive
 Officer Martin Sullivan and certain other AIG officers and directors were
 shareholders of C.V. Starr and had arranged, approved or participated in
 the disputed transactions between AIG and C.V. Starr. The AIG officers and
 directors were also direct beneficiaries of the profits C.V. Starr earned
 from the transactions.
     AIG officers and directors collectively received more than $380 million
 in connection with the 2005-2006 sale of their C.V. Starr stock. For
     -- Martin J. Sullivan, AIG's current Chief Executive Officer, received $14
        million from C.V. Starr
     -- Win J. Neuger, AIG's Executive Vice President & Chief Investment
        Officer, received more than $11 million
     -- Kristian P. Moor, AIG's Executive Vice President-Domestic General
        Insurance, received more than $13 million
     -- Donald P. Kanak, AIG's former Executive Vice Chairman & Chief Operating
        Officer, received more than $12 million.
     -- Thomas R. Tizzio, AIG's former Senior Vice Chairman-General Insurance,
        received more than $46 million
     In 2003, AIG's Board of Directors appointed a Special Litigation
 Committee (SLC), which issued a 150-page report concluding that commissions
 paid by AIG to C.V. Starr in the disputed transactions were "at or below
 market rates," and that the litigation should be terminated. Later, after
 Mr. Greenberg left AIG, the SLC reversed course and decided the litigation
 should proceed - as long as Sullivan and other then-current AIG directors
 and officers were removed as defendants and only Mr. Greenberg and his
 management team remained.
     AIG reversed course only after AIG officers and directors had extracted
 hundreds of millions of dollars from C.V. Starr. Around the same time,
 after Mr. Greenberg left AIG, AIG also advanced claims that it owned or
 controlled assets of C.V. Starr, claims which AIG has since abandoned.
     Contact for C.V. Starr & Co, Inc.:
     Sarah Lubman
     Brunswick Group

SOURCE Boies, Schiller & Flexner LLP