Starr International and Maurice “Hank” Greenberg have “no more than a 20 percent” chance of winning damages in their lawsuit claiming that that the government acted punitively against American International Group’s shareholders when it bailed out insurance giant in September 2008, AIG’s lawyers say.
Paul C. Curnin, AIG’s lawyer at Simpson Thacher & Bartlett LLP, offered the opinion during the Jan. 9 meeting where AIG’s board considered a request to join the Starr/Greenberg suit.
AIG ultimately decided against joining.
The disclosure of Curnin’s advice to the board was made in a letter sent to David Boies, Starr/Greenberg’s lawyer at Boies, Schiller & Flexner on Wednesday night.
The letter was also sent to the U.S. Federal Claims Court in Washington, D.C., which is hearing the suit. Starr and Greenberg are seeking $25 billion from the government.
“Curnin reported that, in the view of all counsel advising AIG and the board, Starr’s claims had a low likelihood of success on the merits,” the letter says.
The letter adds that Curnin specifically told the board that “if it was helpful to the board’s consideration of the demand, he would quantify Starr’s likelihood of success at no more than 20 percent, and that given the difficulties of predicting litigation outcomes, he would add or subtract 5 percent on either side of his estimate.”
According to the letter to Boies, Curnin then told the board, “This estimate took into consideration the fact that Starr is well financed and well represented, and has already survived a motion to dismiss in the Court of Claims action.”
The letter to Boies seeks clarification on whether Starr intends to pursue a derivative action against AIG. The letter also transfers to court filings Boies’ statement on CNBC the day after the Jan. 9 meeting that Starr and Greenberg are “not suing AIG or AIG’s board: we’re looking to the government; we’re not looking to sue AIG.”
The letter says that if Boies’ CNBC statements reflect Starr’s current intentions, “then no derivative claims remain in the case and AIG will no longer be a party to this action, nominal or otherwise.”
If Starr does intend to seek further action against AIG, the letter Starr and Greenberg must file an amended complaint with the Court of Claims demonstrating that AIG wrongfully refused Starr’s request to join the suit against the government.
