WILMINGTON, Del., Dec. 10, 2010 /PRNewswire/ -- The law firms of Grant & Eisenhofer P.A. and Wolf Haldenstein Adler Freeman & Herz LLP have announced a proposed $90 million settlement of a shareholder derivative action on behalf of American International Group, Inc. (AIG).
The settlement was reached in Delaware Chancery Court, Civil Action 769-VCS: American International Group, Inc. Consolidated Derivative Litigation.
The following is a court-approved summary notice to AIG shareholders about the settlement and the upcoming settlement approval hearing.
AIG shareholders with questions regarding the settlement may contact plaintiffs' counsel at 800-575-0735.
SUMMARY NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF SHAREHOLDER DERIVATIVE ACTION, AND OF SETTLEMENT HEARING
ALL RECORD AND BENEFICIAL HOLDERS OF AMERICAN INTERNATIONAL GROUP, INC. COMMON STOCK AT THE CLOSE OF BUSINESS ON NOVEMBER 16, 2010 (THE "RECORD DATE"):
YOU ARE HEREBY NOTIFIED that the Plaintiffs in the above-captioned derivative lawsuit (the "Action") on behalf of American International Group, Inc. ("AIG"), as well as the plaintiffs in the derivative lawsuits captioned In re American International Group, Inc. Derivative Litigation, Master File No. 04-cv-8406 (S.D.N.Y.), Bassman v. Greenberg, et al., No. 05-cv-7022 (S.D.N.Y.), Kleinhandler v. Greenberg, et al., No. 05-cv-6417 (S.D.N.Y.), and Teachers Ret. Syst. of La., et al. v. Cantwell, et al., Index No. 650064/2009 (Sup. Ct. N.Y. Cty.) (collectively, the "New York Actions"), have entered into a proposed settlement (the "Settlement") with those defendants who are current or former officers, directors or employees of American International Group, Inc. (the "D&O Defendants"). The Settlement provides for the payment of $90 million in cash to AIG.
PLEASE BE FURTHER ADVISED that pursuant to an Order of the Court of Chancery of the State of Delaware, dated November 16, 2010, a hearing (the "Settlement Hearing") will be held on January 18, 2011, at 2:00 p.m., before The Honorable Leo E. Strine, Jr., in the Court of Chancery of the State of Delaware, New Castle County Courthouse, 500 North King Street, Wilmington, DE 19801. The purpose of the Settlement Hearing is to (i) determine whether the terms and conditions of the proposed Settlement are fair, reasonable, adequate, and in the best interests of AIG and its stockholders; (ii) determine whether a judgment should be entered dismissing with prejudice the shareholder derivative claims asserted on behalf of AIG in the Action against the D&O Defendants; (iii) hear and determine any objections to the Settlement; (iv) consider a request by the Plaintiffs' counsel in the Action for an award of attorneys' fees equal to 22.5% of the Settlement Amount and expenses of no more than $1 million; and (v) consider such other matters as the Court deems appropriate.
The Action and Settlement address claims alleging that the D&O Defendants breached their fiduciary duties to the Company and otherwise committed wrongdoing to the detriment of AIG in connection with various allegedly fraudulent schemes during the 1999-2005 time period. These include claims relating to allegations of participation in a bid-rigging scheme with Marsh & McLennan Companies, Inc. ("Marsh"), payment of contingent commissions to Marsh, participation in sham reinsurance transactions with General Re Corporation, and other activities that were allegedly designed to manipulate AIG's financial results and thus subjected AIG to substantial liability and fines. The D&O Defendants believe they have substantial defenses to the claims alleged against them, and each of them denies and continues to deny all allegations of wrongdoing and denies liability on the claims asserted in the Action. The Settlement does not affect the Plaintiffs' claims against defendants other than the D&O Defendants, which claims have been dismissed but are the subject of pending appeals.
Pursuant to the Settlement, the insurance carriers that provide director and officer liability coverage to the D&O Defendants (the "Insurance Carriers") will pay $150 million of the $200 million in possible coverage. Of this amount, $90 million (the "Settlement Fund") will be paid to AIG, and $60 million will be paid to Greenberg and Smith as partial reimbursement of their legal costs. At or before the Settlement Hearing, Plaintiffs' counsel in the Action will apply to the Court for an award of attorneys' fees not to exceed 22.5% of the Settlement Fund and for reimbursement of costs and expenses not to exceed $1 million, to be paid solely from the Settlement Fund. Counsel for the plaintiffs in certain of the New York Actions agreed to ask the court in those cases for an award of attorneys' fees and expenses totaling no more than $2.5 million.
If the Settlement is approved, the Action and, it is contemplated, the New York Actions, will be dismissed with prejudice against the D&O Defendants, and AIG's shareholders will release all derivative claims that were or could have been alleged regarding the transactions challenged.
ANY INVESTOR WHO OWNS AIG COMMON STOCK AS OF THE RECORD DATE AND WHO WISHES TO CONTEST EITHER THE SETTLEMENT OR THE APPLICATION FOR FEES AND EXPENSES BY PLAINTIFFS' COUNSEL MAY DO SO BY FOLLOWING THE PROCEDURE SET FORTH IN THE NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF DERIVATIVE ACTION, AND OF SETTLEMENT HEARING (the "Notice"). The Notice, the Agreement, and the Court's November 16, 2010 Scheduling Order, are available on Plaintiffs' counsel's websites at www.gelaw.com and www.whafh.com, and will be available by December 14, 2010 on AIG's website at http://www.aigcorporate.com/investors/dividend_history.html.
PLEASE DO NOT CONTACT THE COURT OR THE REGISTER IN CHANCERY.
Dated: December 10, 2010
BY ORDER OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE
SOURCE Grant & Eisenhofer; Wolf Haldenstein