Several Companies Dismissed From AIG Shareholders Suit

A Delaware judge dismissed four companies from a lawsuit accusing them of helping American International Group Inc. deceive investors.

The claims against Berkshire Hathaway Inc.; its General Reinsurance Corp. subsidiary; Marsh & McLennan Cos.; and Ace Ltd. were rejected by Delaware Chancery Court Judge Leo Strine.

Strine dismissed claims by AIG shareholders that the four companies conspired to help AIG overstate its finances.

The judge said long-standing precedent held that the court should not attempt the "extremely complex economic and fault-finding involving speculation about the extent to which each participant was a net winner or loser as a result of its illegal conduct.?

Strine wrote,"In this context there is no societal interest in making sure that each party gets its 'fair' share of the conspirators' societally unfair bargain."

Last year, Strine approved a $115 million settlement between plaintiffs in the suit and former AIG head Maurice ?Hank? Greenberg and other former AIG officials (BestWire Dec. 18, 2008).

One former executive of AIG and four from General Re, a member of the Berkshire Hathaway Insurance Group, were convicted in connection with a fraudulent finite reinsurance transaction between Gen Re and AIG (BestWire, April 30, 2009).

Bid-rigging allegations involving MMC and Ace stemmed from national investigations into insurance industry billing practices and allegations of contract steering, which grew out of New York state investigations in 2004. States are still pursuing some of these issues (BestWire, May 11, 2009).

AIG has been selling assets to repay federal aid as it restructures its businesses under a federal rescue program that has grown to up to $182.5 billion in loans and other assistance since September, when it nearly fell into bankruptcy because of credit derivative investments (BestWire, June 10, 2009).

MMC declined to comment on the decision. Efforts to obtain comment from the other companies were not immediately successful.

MMC is the second-largest broker in the world based on 2008 brokerage revenue, according to the Best?s Review ranking of global brokers.

General Reinsurance Corp. currently has a Best's Financial Strength Rating of A++ (Superior).

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

Ace American Pool currently has a Best?s Financial Strength Rating of A+ (Superior).

Shares of AIG  were $1.42 in afternoon trading on June 22, down 7.84% from the previous close.

Shares of Ace Ltd. (NYSE: ACE) were $ 42.72 in late afternoon trading on June 22, down 0.56% from the previous close.