Disgruntled AIG Shareholder Files Suit in L.A.

In the latest in a series of legal actions taken against beleaguered insurer American International Group Inc., a retired California judge is seeking to recover millions of dollars in executive bonuses on behalf of company shareholders.

The lawsuit, filed Wednesday in Los Angeles Superior Court, claims that the company had no legal justification for paying $165 million in bonuses and other perks after the insurance giant received more than $180 billion in government aid.

“There was no rational business purpose or justification for these lucrative
additional payments, particularly given AIG’s deteriorating financial condition,” stated the lawsuit filed by Cotchett, Pitre & McCarthy on behalf of AIG shareholder John Bible.

Among the defendants named are Chief Executive Edward Liddy and Stephen Bollenbach, a director and former Hilton Hotels chief executive.

Last week, nonprofit government watchdog Freedom Watch filed a similar lawsuit on behalf of shareholders in U.S. District Court in Los Angeles.

The company could not be reached for comment late Wednesday.