Greenberg, AIG Bury Hatchet

November 30, 2009 at 07:00 PM
Share & Print

American International Group Inc. and a former chairman, Maurice Greenberg, say they have agreed to settle all outstanding disagreements.

AIG, New York, (NYSE:AIG) have been locked in a bitter battle since 2005, when Greenberg left the company in the wake of questions about company accounting practices.

Greenberg and Howard Smith, a former AIG chief financial officer, and AIG have mutually agreed to settle all disputes between them and affiliated business entities, including Starr International Company and C.V. Starr & Company, according to Greenberg and AIG.

The agreement calls for an arbitrator to review the claims Greenberg and Smith have made for past legal fees and expenses to determine how much of the past legal fees AIG is legally obliged to pay. There is a cap of $150 million under the agreement.

"We are pleased that we have resolved our differences," AIG Chairman Robert Benmosche says in a statement accompanying the agreement announcement. "The resolution of these long-running disputes will remove a significant distraction and expense and allow AIG to better focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders."

"I too am pleased that these long-running disputes are now over, and I want to express my appreciation for Bob Benmosche's help, and the help of the AIG board, in resolving them," Greenberg says in a statement accompanying the same announcement. "I look forward to assisting AIG in trying to preserve and restore as much value as possible for all of AIG's stakeholders."

Smith has agreed with Greenberg, the parties say.

Former U.S. District Court Judge Layn Phillips, an attorney with Irell & Manella L.L.P., Los Angeles, will be the arbitrator for questions about legal bills and any other disagreements between the parties, according to a document filed with the U.S. Securities and Exchange Commission.

Payment to the parties under AIG's directors and officers insurance agreement will be arbitrated by Daniel Weinstein, a former California judge, who now runs the Weinstein Mediation Center.

The agreement permits Greenberg to use archival materials in AIG's possession for the purposes of writing his memoirs, and the agreement also calls for the return of property that AIG possesses which belongs to him.

Among the Greenberg belongings listed in the agreement are a Persian rug and photographs of Greenberg and Cornelius Vander Starr, Greenberg and Chinese leaders in AIG's Shanghai building.

In a separate filing, AIG says it has changed compensation for some executives in response to orders from the special master for Troubled Asset Relief Program executive compensation.

AIG Chief Financial Officer David Herzog now will receive a salary of $350,000. He will get annual stock salary of about $3.1 million, and he will be eligible to receive up to $833,333 in 2009 annual long-term incentive awards payable in restricted stock.

Kristian Moor, a second AIG executive, will get $450,000 in cash salary and less than $4.7 million in stock salary, along with up to $2 million in annual long-term incentive awards.

Win Neuger, a third AIG executive, will get $425,000 in cash salary, but he will not receive any additional awards, because he is leaving the company, AIG says.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Related Stories

Resource Center