Starr International and Maurice “Hank” Greenberg, its controlling shareholder, have “no more than a 20 percent” chance of winning damages from the government in its lawsuit claiming that that the government acted punitively against its shareholders when it acted to bail out American International Group starting in September 2008, AIG’s lawyers have told its board.
The opinion on the viability of the Starr lawsuit against the government was made by Paul C. Curnin, AIG’s lawyer at Simpson Thacher & Bartlett LLP, in New York, during the Jan. 9 meeting where AIG’s board considered Starr/Greenberg’s request that AIG join the lawsuit.
It was at that meeting that the AIG board decided not to join the lawsuit, and doing so in such a way that even in the event Starr/Greenberg won the lawsuit, AIG would not benefit.
The disclosure of Curnin’s advice to the board was made in a letter sent to David Boies, Starr/Greenberg’s lawyers at Boies, Schiller & Flexner in Armonk, N.Y., Wednesday night and obtained by the National Underwriter.
The letter was also sent to the U.S. Federal Claims Court in Washington, D.C., which is hearing the suit. In the suit, Starr/Greenberg are seeking $25 billion from the government.
“Curnin reported that, in the view of all counsel advising AIG and the board, Starr’s claims had a low likelihood of success on the merits,” the letter says.
The letter said that Curnin specifically told the board that, “if it was helpful to the board’s consideration of the demand, he would quantify Starr’s likelihood of success at no more than 20 percent, and that given the difficulties of predicting litigation outcomes, he would add or subtract 5 percent on either side of his estimate.”