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U.S. markets recover from steep losses
NEW YORK, Dec. 5 (UPI) -- A New York judge refused to dismiss breach of fiduciary duty charges against American International Group Inc.'s former chairman, Maurice Greenberg.
Supreme Court Justice Charles Ramos said AIG was entitled to present its case against Greenberg, former AIG Chief Financial Officer Howard Smith and others, Business Insurance reported Friday.
The charges stem from a dispute over a block of AIG shares worth about $20 billion in 2005 that was used to finance an employee compensation plan at AIG. Starr International Co. Inc., which Greenberg controls, owns the shares, the report said.
"Ultimately, whether Greenberg and Smith properly discharged their duties of loyalty to AIG while simultaneously serving as SICO directors will require a fact-intensive assessment of their conduct, not properly disposed of at the pre-answer stage," Ramos said.
With AIG receiving billions in federal bailout funds, "it's curious that AIG is using litigation to try to expand the bonus pool for its top executives," Greenberg's attorney Chris Duffy said in a statement.
A company spokesman said AIG was "pleased with the court's decision."
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