Former American International Group (AIG) CEO Maurice "Hank" Greenberg and three other former executives settled in court on Thursday a shareholder lawsuit to the tune of $115 million. The settlement prevents the case from going to a scheduled trial next week.According to the details from the settlement, AIG will obtain proceeds from the settlement, less fees. An insurance policy that covers the former directors and officers will cover approximately $86 million of the deal arranged today. The other people involved were former chief financial officer Howard Smith, former vice-chairman of investments Edward Matthews, along with former vice-chairman Thomas Tizzio.
C.V. Starr, a business formerly affiliated with AIG and today run by Greenberg, who left AIG in 2005, will reportedly pay the remainder of the settlement.
The settlement resolves the lawsuit that first gained attention in 2002, and brought by AIG shareholder Teachers Retirement System of Louisiana.
Among the allegations were that some executives and directors breached their fiduciary duties by forwarding business worth hundreds of millions of dollars in commissions to C.V. Starr, claiming the business should have been sent straight to AIG.
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