A spokesman for the New York Insurance Department said regulators "are more than happy" to meet and hold another discussion with former American International Group Chairman Maurice Greenberg's lawyers over possible attempts to sway stockholders and exert unauthorized control of his former company.
In filings with the U.S. Securities and Exchange Commission, it was revealed that the New York Insurance Superintendent Eric Dinallo warned Mr. Greenberg last month that he and a group of other AIG shareholders were illegally exerting influence on the company.
The fact that the group, according to Mr. Dinallo, "collectively owned almost 12 percent of AIG's voting shares makes the Group a controlling person under New York Insurance Law Article 15. Having failed to receive the superintendent's prior approval to possess control…the Group stands in violation of Article 15 [regulating control of insurance companies] unless and until it obtains a determination by the Superintendent."
In the wake of an exchange of letters and one meeting with three of the group's attorneys, the department is ready to meet again, said Andy Mais, an insurance department spokesman. On Dec. 12, a lawyer for the group, Marcia Alazraki, wrote and asked for the meeting.
Ms. Alazraki wrote Kermitt J. Brooks, the first deputy superintendent, stating the demand that the group "cease and desist" activities aimed at exercising a controlling influence is based on an "erroneous view" by the department that the group is a "controlling person."
Mr. Greenberg was forced out two years ago as AIG chairman and chief executive amid investigations by then New York Attorney General Eliot Spitzer and federal authorities that probed allegations of accounting fraud and commercial insurance bid-rigging.
New York eventually filed a civil fraud action, alleging that improper finite reinsurance transactions took place designed to boost AIG's stock price. Although Mr. Greenberg remains a defendant in that case, the insurance company was let out of the suit after agreeing to a $1.6 billion settlement.
Mr. Greenberg and his former company have been in a legal battle ever since over who was to blame, and Ms. Alazraki pointed to this as an argument that he has no control over the company, noting that AIG is suing Mr. Greenberg for $1 billion and Starr International for over $15 billion. Mr. Greenberg is currently chairman and CEO of C.V. Starr & Company.
The group members–in addition to Mr. Greenberg–include: Edward Matthews, Starr International Company, C.V. Starr & Company Inc., Universal Foundation Inc., the Maurice R. And Corinne P. Greenberg Family Foundation Inc.; the Maurice R. and Corinne P. Greenberg Joint Tenancy Company LLC, and C.V. Starr & Company, Inc. Trust.
Ms. Alazraki wrote that the group had joined to evaluate strategic alternatives "designed to lead to the maximization of their investment in AIG," including "disposition of certain of its operations." The group believes "there are opportunities to improve AIG's performance and strategic direction," she said, adding that they wanted to discuss these options with other stockholders.
According to a report by Reuters, AIG said Mr. Greenberg's comments last month about strategic alternatives were code words that "set off a frenzy of market and media speculation" that he was pushing for an AIG breakup or acquisition.
Mr. Brooks, in writing Ms. Alazraki, noted that one of the group's lawyers, in meeting with the department, "conceded that 'everybody knows' that the 13 D Group is 'already a controlling person' under Article 15."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.