A $115 million settlement between American International Group Inc. shareholders and former executives including Maurice “Hank” Greenberg was approved by a judge in New York.
U.S. District Judge Deborah Batts granted final approval to the agreement at a hearing today in Manhattan federal court. The ruling resolves claims by AIG shareholders against Greenberg, former Chief Financial Officer Howard Smith, former Vice President of Reinsurance Christian Milton, former Comptroller Michael Catelli and Greenberg companies C.V. Starr and Starr International Co.
The plaintiffs, led by a group of Ohio public pensions, sued in 2004 and 2005, claiming the Starr defendants misstated their involvement in alleged market-division and bid-rigging schemes and also misled investors about an alleged accounting fraud at AIG that resulted in the company’s restating $3.9 billion of earnings. A later restatement reduced the amount to $3.4 billion.
Proceeds of the settlement, minus about $16 million in legal fees and expenses, will go to a class of investors who bought AIG shares from Oct. 28, 1999, to April 1, 2005. On April 4, Batts rejected the single objection to the agreement that was received by the court, ruling that the Orloff Family Trust wasn’t eligible to object to the settlement.
The case is In Re American International Group Inc. Securities Litigation, 04-cv-8141, U.S. District Court (Manhattan).