After years of lawsuits, American International Group Inc., its former chairman and CEO and its former chief financial officer have agreed to accept binding arbitration of various legal disputes among them.
In a joint statement, AIG, its former chairman and CEO Maurice R. Greenberg, and its former CFO Howard I. Smith said they have concluded that it is “preferable to resolve as many of their disputes as possible in a private setting and in a more expeditious and cost-effective manner.”
The action comes on the heels of the appointment of Robert H. Benmosche as AIG’s fourth chief executive officer in just over a year just weeks ago. Benmosche came out of retirement to take over for Ed Liddy.
The arbitration will begin no later than Oct. 15, and will conclude by Mar. 31, 2010, the statement said.
In a written agreement filed yesterday, the parties stated that the following claims should be submitted immediately to binding arbitration:
All claims of AIG against Greenberg and Smith in American International Group Inc. Consolidated Derivative Litigation, Civil Action No. 769-VCS; all claims of AIG against Greenberg and Smith In re American International Group Inc. Derivative Litigation, Master File No. 04 Civ. 8406 (DLC); and all claims of Greenberg and Smith against AIG for advancement or indemnification.
The parties do not purport to include in the arbitration any claims currently being prosecuted in pending cases by AIG shareholders against Greenberg or Smith.
The parties also will consider whether to arbitrate:
o AIG’s claims against Starr International Company Inc. in Starr International Company Inc. v. American International Group Inc., No. 05 Civ. 6283; and against Greenberg, Smith and the other defendants in American International Group Inc. v. Greenberg et al., N.Y. Sup. Ct., Index No. 600885/08, after final decision on any appeals in the federal SICO case.
o Greenberg’s and related entities’ subprime-related claims against AIG (Greenberg v. American International Group Inc., 09 Civ. 1885); Starr Foundation v. American International Group Inc., N.Y. Sup. Ct., Index No. 601380/08; and Starr International Company Inc. v. American International Group Inc. after final decisions have been rendered on defendants’ motions to dismiss those actions and any other claims by or between the parties, their agents, and affiliates if and when they arise, the document said.
In the meantime, the parties agree to stay immediately all other proceedings in the state SICO case and the subprime cases for all defendants in those cases.
The arbitrations will be determined by a single arbitrator, to be agreed to by the parties.
Finally, the agreement said that the only documents or other information concerning the arbitration to be made public is the arbitrator’s final ruling and award.