AIG got shut out yesterday in its latest court attempt to seize $365 million in stock held in a charity the insurance giant wants to tap so it can pay additional bonuses to AIG executives.
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A state appellate court denied AIG’s effort to launch its bonus hunt in New York state courts. The court instead kicked the issue back to federal courts, which already have shot down some of AIG’s earlier efforts to seize the booty.
AIG has battled for the stock on two legal fronts simultaneously, in federal and state courts, with mixed results for 3½ years, running up a legal tab nearing $100 million.
The state fight has been put on hold until the federal case ends.
The assets include 290 million AIG shares owned by the Starr Foundation, which is headed by AIG founder Hank Greenberg and 12 directors of the private offshore Starr International Co. Starr’s offices are located in Panama.
The Starr Foundation has used at least $2 billion of the assets as grants to New York hospitals, cancer research and colleges and schools around the world.
Despite AIG’s public flogging for its $165 million in questionable bonuses, and yesterday’s setback, the firm plans to press its claim in Manhattan federal court in a trial starting June 2.
AIG claims that Greenberg and others hijacked the shares. In past years, Greenberg and other Starr founders used the foundation’s big stock pot to reward AIG employees, separately from AIG.
AIG’s lawsuit said it wants to continue using the stock but admits it has no documentary evidence of ownership, just an “oral trust” overheard in the 1970s.
AIG agreed in its federal court case last week to give back $15 million worth of Greenberg’s paintings, including a Vincent van Gogh work, hanging in AIG offices.