A U.S. District Court jury in New York has ruled in favor of Maurice Greenberg, the former chairman of American International Group Inc., in a dispute over control over AIG stock.
The jury rejected a claim by AIG, New York, that Starr International Company, a company led by Greenberg, had broken the law by taking AIG shares from a fund for retiring AIG employees. The jury also rejected allegations that Greenberg had broken the rules governing trusts when he took out the shares. The second decision was an advisory decision.
An AIG lawyer had accused Greenberg, who was forced to leave AIG in 2005, of lying when he testified that there were no restrictions on his control of the AIG shares.
Greenberg’s lawyer had told the jury that AIG made up its claim after Starr International sued AIG over disputed art work.
AIG had maintained that a Starr International trust was supposed to reward key executives with extra compensation that would be delayed until after the executives retired.
The jury heard evidence for three weeks and was handed the case this morning. The jurors took only a few hours to decide in favor of Star International’s argument that the company owed nothing to AIG.
During 7 days on the witness stand in a courthouse in Manhattan, Greenberg testified that Starr International set up the plan involved in the dispute to reward employees belonging to a group of companies under the AIG banner. The group included Starr International and C.V. Starr, Greenberg testified.
Starr International attorney David Boies argued that there was no documentation to back up AIG’s claim and nothing to show that the company had ever created a trust within Starr International.
AIG used memos that discussed the deferred compensation program and the text of Greenberg speeches in an attempt to provide evidence that a trust existed.
U.S. District Judge Jed S. Rakoff still must decide whether there was an express trust or breech of fiduciary duty by Starr International. He said in an order before the trial began that the jury’s decision on this issue would be used in an advisory capacity.
A spokesman for the court says Rakoff will issue his decision some time in August.
In a statement AIG says, “We are disappointed by the jury’s verdict and we await the court’s final ruling. We continue to believe in the merits of our case.”
Liz Bowyer, a Starr International representative, welcomed the jury’s verdict.
“We are gratified by the jury’s quick and complete vindication of Starr International and Mr. Greenberg and the jurors’ quick and complete rejection of the outrageous personal attacks on Mr. Greenberg’s character by AIG and its counsel,” Bowyer says in a statement.