Popular Searches:  LIFE  AIG  financial  china  sunamerica+aig  old republic

AIG to Use Any Award From SICO Lawsuit to Repay Loans

 

Wednesday, Jun 17,2009, 11:44:27 AM   Click:

American International Group will use any award it receives in a multibillion-dollar lawsuit against a company controlled by its former chairman to help repay loans and other aid from the federal government, the company said.

The trial, over claims between AIG and Starr International Co. Inc. surrounding control of a large block of AIG stock, begins June 15 before U.S. District Judge Jed Rakoff in the Southern District Court in Manhattan.

AIG is seeking control of its stock and $4.3 billion that it claims Starr reaped in selling some of the stock between 2005 and 2008.

SICO is controlled by Maurice ?Hank? Greenberg, who led AIG for nearly four decades before being forced out during an accounting scandal in 2005.

AIG claims that after leaving AIG, Greenberg engineered a takeover of SICO, which had been controlled by AIG during Greenberg?s tenure, and violated SICO?s fiduciary responsibility for what AIG claims was a trust primarily designed to fund executive compensation plans. AIG claims Starr converted the stock held in the trust, valued at one time at as much as $20 billion, for its own use.

SICO maintains that no trust agreement was ever put into writing.

?AIG intends to use any monetary damages, including the $4.3 billion from SICO?s illicit stock sales, to repay the company?s debt to the U.S. government,? said AIG spokesman Mark Herr.

AIG has been kept solvent since September by a federal rescue plan that has grown to $182.5 billion in loans and other assistance.

Herr said AIG will use ?any stock recovered from SICO for employee long-term compensation, under the oversight of the government.?

SICO spokesman Patrick Dorton said ?this ?trust? was never put in writing, never disclosed to AIG shareholders or the (U.S. Securities and Exchange Commission), and never included on AIG's balance sheet or financial statements.?

SICO originally sued AIG in 2005, claiming the company kept an art collection belonging to SICO, valued at $15 million. AIG countersued over the stock issue. Court documents state that AIG and SICO have agreed that the artwork belongs to SICO (BestWire, June 5, 2009).

Greenberg is on AIG?s witness list and may testify early in the trial.

AIG has also filed suit over the stock in New York state court.

Last year, U.S. District Judge Barbara Jones dismissed claims in the suit that Starr was in breach of contract or of an AIG compensation plan, and that it unfairly held the stock (BestWire, June 24, 2008).

Most AIG insurance companies currently have a Best?s Financial Strength Rating of A (Excellent) with a negative outlook.

  • Print

You may also be interested in:

Discuss this news

Click Here to see all comments
Please aware of self to obey the Internet related policy laws and strictly forbid to release porn, violence.
Appraisal:

Name:

Email:

Content:

Featured

Copyright 2009 Cable News NetworkAll rights reserved CNN.com 20 March 2009 Friday 6:40 PM EST SECTION: WAYOFLIFE LENGTH: 1244 words TITLE: Tips for buying used cars Signature: Eric Peters The main

Tips on Buying Used Cars

Copyright 2009 Cable News NetworkAll rights reserved CNN.com 20 March 2009

BUYINS.NET / www.squeezetrigger.com is monitoring the performance of all stocks with earnings being released in the coming weeks and determining how the stocks have performed before their last 12

QCOM, ILMN, ADS, CIT, CKH, ATNI Expected To Be Lower

BUYINS.NET / www.squeezetrigger.com is monitoring the performance of all stocks

Despite half of health plans in Michigan recording lower net profit in 2008 than the previous year, 10 of the largest overall profits rose an average 11.7 percent to $ 183.8 million from $ 164.6

Some of some of the largest HMO Manage To increase

Despite half of health plans in Michigan recording lower net profit in 2008

TAMPA, Florida - (BUSINESS WIRE) - Avalon Healthcare, Florida, the state increasingly rapid individual and group health insurance, has signed an agreement with the supplier of the Manatee Memorial

Avalon Healthcare signs agreement with Manatee

TAMPA, Florida - (BUSINESS WIRE) - Avalon Healthcare, Florida, the state

Copyright 2009 Marketwire, Inc.All Rights Reserved Marketwire April 23, 2009 Thursday 7:50 AM GMT LENGTH: 617 words HEADLINE: Americans Say They Don't Have a Voice Anymore, According to American

Americans Say They Don''t Have a Voice Anymore, 2 In 5

Copyright 2009 Marketwire, Inc.All Rights Reserved Marketwire April 23, 2009

Copyright 2009 The Times-Picayune Publishing Company Times-Picayune (New Orleans) April 12, 2009 Sunday SECTION: METRO - EDITORIAL; Pg. 4 LENGTH: 699 words HEADLINE: EDITORIAL: Katrina costs us,

Katrina cost us, Again

Copyright 2009 The Times-Picayune Publishing Company Times-Picayune (New

Sterling Financial Corporation (NASDAQ: STSA) today announced that its subsidiary, Sterling Savings Bank, has entered into an agreement with its regulators to continue taking actions to strengthen

Sterling Financial Corporation of Spokane, Washington,

Sterling Financial Corporation (NASDAQ: STSA) today announced that its

MOST POPULAR