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.
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.:
SOURCE Boies, Schiller & Flexner LLP