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November 30, 2009 at 07:00 PM
American International Group Inc. and a former chairman, Maurice Greenberg, say they have agreed to settle all outstanding disagreements.
AIG, New York, (NYSE:AIG) have been locked in a bitter battle since 2005, when Greenberg left the company in the wake of questions about company accounting practices.
Greenberg and Howard Smith, a former AIG chief financial officer, and AIG have mutually agreed to settle all disputes between them and affiliated business entities, including Starr International Company and C.V. Starr & Company, according to Greenberg and AIG.
The agreement calls for an arbitrator to review the claims Greenberg and Smith have made for past legal fees and expenses to determine how much of the past legal fees AIG is legally obliged to pay. There is a cap of $150 million under the agreement.
“We are pleased that we have resolved our differences,” AIG Chairman Robert Benmosche says in a statement accompanying the agreement announcement. “The resolution of these long-running disputes will remove a significant distraction and expense and allow AIG to better focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders.”
“I too am pleased that these long-running disputes are now over, and I want to express my appreciation for Bob Benmosche’s help, and the help of the AIG board, in resolving them,” Greenberg says in a statement accompanying the same announcement. “I look forward to assisting AIG in trying to preserve and restore as much value as possible for all of AIG’s stakeholders.”
Smith has agreed with Greenberg, the parties say.
Former U.S. District Court Judge Layn Phillips, an attorney with Irell & Manella L.L.P., Los Angeles, will be the arbitrator for questions about legal bills and any other disagreements between the parties, according to a document filed with the U.S. Securities and Exchange Commission.
