Asbury Park Press - AIG lawyer tells jury that former CEO lied

By Bloomberg News Service

Maurice “Hank” Greenberg, the former chief executive officer of American International Group Inc., lied repeatedly at a trial over whether his private company looted $4.3 billion, an AIG lawyer told jurors today.

AIG accuses Greenberg’s Starr International Co., or SICO, of breaching an unwritten trust to fund a deferred-compensation plan for AIG employees. SICO illegally converted the proceeds of AIG shares it sold after Greenberg’s firing in March 2005, AIG lawyer Ted Wells said in federal court in New York.

Wells cited “overwhelming” evidence that SICO began holding AIG shares in 1970 for a retirement plan to benefit AIG employees. Greenberg was enraged after his ouster, and SICO fabricated documents to show the shares benefited charity, not AIG, Wells said. Greenberg also lied to jurors about videotaped speeches in which he discussed the disputed shares, Wells said.

“He fabricated evidence,” Wells said in closing arguments at a civil trial that began June 15. “He lied from the witness stand. What he told you is not credible evidence. Mr. Greenberg gave you false testimony repeatedly.”

In his summation, SICO attorney David Boies countered that no written evidence supports the claim by New York-based AIG that an unwritten trust exists solely to benefit the insurer.

“The trust that AIG says exists simply was made up for the purposes of this litigation,” Boies argued at the start of closing arguments that continue later today.
On the stand

Greenberg, 84, spent seven days on the witness stand, saying SICO was never obligated to continue funding a retirement plan that only benefited AIG employees. Rather, he said, shares could be used for other projects and would ultimately benefit charity at the discretion of SICO’s voting shareholders.

“The evidence was real, the evidence exists,” Boies said. “There is absolutely indisputable evidence that the core of shares that was set aside for people’s retirement has never been touched, has never been sold.”

AIG asserted for the first time in 2005, after the litigation began, that SICO owed a duty to the deferred- compensation plan.

“I leave it up to you to determine what has been fabricated,” Boies said.

Jurors will weigh whether SICO improperly converted, or took, AIG shares after Greenberg’s ouster. U.S. District Judge Jed Rakoff will decide if SICO breached its fiduciary duty.

AIG has said it will use proceeds of any judgment to help repay the $182.5 billion bailout package it received from the federal government.

The SICO case is Starr International Co. v. American International Group Inc., 05-cv-06283, U.S. District Court, Southern District of New York (Manhattan).

To read this article in the Asbury Park Press, click here.

-------------------------------------------------------------------------------------------------------------------------

FAIR USE NOTICE  
This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. In accordance with Title 17 U.S.C. Section 107, the material on this site is available without profit for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.