August 27, 2010 in Business

Ex-AIG executive agrees to settlement

Bloomberg News

(Full-size photo)

WILMINGTON, Del. – American International Group Inc.’s former top executive Maurice “Hank” Greenberg agreed Thursday to a $90 million settlement of lawsuits alleging he deceived investors while running the insurer, according to a court filing.

The insurers that cover AIG’s executives agreed to pay the money to resolve claims that Greenberg, the former chief executive officer, and other officials used accounting tricks and fraudulent schemes to disguise problems, according to the filing in Delaware Chancery Court. The money is being paid to AIG and not individual investors as part of the agreement.

The settlement in the case, a so-called derivative suit filed by investors against executives and directors on behalf of the company, comes a month after AIG agreed to separately pay $725 million to investors who lost money amid the company’s share decline. In 2008, AIG accepted a U.S. government bailout that has swelled to $182.3 billion.

“We are pleased this matter has been satisfactorily resolved,” Mark Herr, an AIG spokesman, said in an e-mail.

AIG said in November that it settled all legal disputes with Greenberg and would reimburse as much as $150 million in fees. Greenberg and the insurer agreed not to make disparaging statements about each other.

Greenberg, 85, built AIG into the world’s largest insurer over almost four decades until he was forced to retire in March 2005 amid state and federal probes into a reinsurance transaction. Lawsuits kept AIG and its former top executive in court since his departure.

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