Former AIG executives to pay $115 million

NEW YORK, Sept. 12 (UPI) -- Former executives of American International Group Inc., have agreed to a $115 million pretrial settlement to end a civil fraud lawsuit in Delaware.

The case began six years ago. The Teachers Retirement System of Louisiana sought $1 billion on claims AIG Chief Executive Officer Maurice Greenberg, Chief Financial Officer Howard Smith and two vice chairmen, Edward Mathews and Thomas Tizzo, overpaid commissions to companies the men controlled, Business Insurance reported Friday.

The suit also said the executives over-compensated themselves as officers of C.V. Starr & Co., which had business tie-ins to AIG.

"At times relevant to this case, Starr was controlled and owned by top AIG executives," a chancery court ruling in 2006 declared.

The plaintiff's attorney Stuart Grant called the settlement "fantastic," but, Greenberg's lawyer said his client wouldn't pay out of his own pocket.

"Mr. Greenberg, who built AIG into the largest and most successful insurance company in the world, will not make any payments in connection with this settlement," said Lee Wolosky.

"The preponderance of the settlement -- $85.5 million -- will be paid by insurance carriers."

Between $20 million and $30 million would be paid by C.V. Starr & Co., Wolosky said.