|[January 08, 2013]
AIG Issues Statement on Starr Litigation
NEW YORK --(Business Wire)--
American International Group, Inc. (NYSE: AIG) confirmed today that the
AIG Board of Directors will consider, at a meeting scheduled for January
9, 2013, the demand served on the AIG Board of Directors on September
21, 2012, by Starr International Company, Inc. ("Starr") as to whether
AIG will take over, or allow Starr to continue to pursue, a lawsuit that
Starr filed on behalf of itself and other AIG shareholders contesting
the Constitutionality of certain terms of the U.S. government's rescue
of AIG in September 2008.
Under applicable law, as well as according to certain court rulings, the
AIG Board must consider and respond to Starr's demand, and expects to do
so by the end of January 2013.
Specifically, in November 2011, Starr filed a lawsuit in the United
States Court of Federal Claims and the United States District Court for
the Southern District of New York alleging, among other things, that the
Government's 2008 receipt of a 79.9% equity interest in AIG constituted
a wrongful "taking" without just compensation, in violation of the
United States Constitution. The lawsuit makes claims on a "derivative"
basis in the name of AIG and for its benefit, as well as on a "direct"
basis on behalf of Starr and other similarly-situated shareholders.
By its demand, Starr requests that the AIG Board authorize AIG to assume
control of the claims that Starr is pursuing in AIG's name or allow
Starr to pursue these claims on AIG's behalf. Starr's complaint seeks
approximately $25 billin in damages.
The Board has three options with respect to the derivative claims
asserted on its behalf: (1) take over Starr's claims and prosecute them
on its own; (2) refuse the demand and prevent the claims from being
prosecuted by Starr, a decision Starr is likely to challenge; or (3)
allow Starr to prosecute the claims on AIG's behalf. Importantly, the
Court of Federal Claims has denied the Government's motion to dismiss
the suit, so that the case will go forward with or without AIG's
participation. If AIG does not allow the derivative claims to proceed on
AIG's behalf and Starr prevails or obtains a favorable settlement on its
direct claims, then AIG will not receive any of the amounts recovered.
It is the AIG Board's obligation and intention to consider seriously
Starr's demand and respond to it in a manner that the Board believes
is in the best interest of the Company, taking into account all the
"AIG has paid back its debt to America with a profit, and we mean it
when we say thank you to the American people," said Robert H. Benmosche,
President and Chief Executive Officer of AIG. "At the same time, the
Board of Directors has fiduciary and legal obligations to the Company
and its shareholders to consider the demand served on us and respond in
a fair, appropriate, and timely manner. Tomorrow's Board meeting is
about listening to all of the parties involved and gaining a thorough
understanding of the issues. We anticipate making a decision in the next
AIG is the world's largest insurance organization, serving more than 88
million customers in over 130 countries and jurisdictions around the
world. AIG businesses are market leaders in property casualty insurance,
life insurance and retirement services, mortgage insurance, and aircraft
Additional information about AIG can be found at www.aig.com
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