Jury Finds For Greenberg's SICO

NU Online News Service, July 7, 4:26 p.m. EDT

A federal jury in Manhattan rejected a claim by American International Group that Starr International Company (SICO), headed by Maurice Greenberg, was obligated to hold shares of AIG stock in trust for retiring AIG employees.

Mr. Greenberg, who was forced to leave as chairman and chief executive officer of AIG in 2005, had been called a liar by AIG's attorney for his testimony that there was no trust restriction.

His attorney had told the jury the company made up its claim after SICO sued AIG over some disputed art work.

AIG had maintained there was a trust set through SICO to reward key executives with extra compensation that would be delayed until after retirement.

The jury, which heard evidence for three weeks, was handed the case this morning. The panel took less than a few hours to decide in favor of SICO that the company owed no liability to AIG.

During seven days on the witness stand in U.S. District Court in Manhattan Mr. Greenberg testified that SICO set up the plan to reward employees belonging to a group of companies under the American International banner which also included SICO and C.V. Starr.

SICO attorney David Boies argued that there was no documentation to back up AIG's claim and nothing to show that the company ever created a trust within SICO.

AIG attorney Theodore Wells hammered away at Mr. Greenberg, trying to impeach his testimony, and accused him of lying while on the witness stand.

AIG relied on memos that discussed the deferred compensation program and speeches made by Mr. Greenberg to participants in the SICO plan as evidence that a trust existed.

Still to be decided by U.S. District Judge Jed S. Rakoff is whether there was an express trust or breech of fiduciary duty by SICO. He said in an order before the trial began that the jury's decision on this issue would be used in an advisory capacity.

A spokesman for the court said Judge Rakoff would issue his decision some time in August.

In a statement AIG said, "We are disappointed by the jury's verdict and we await the court's final ruling. We continue to believe in the merits of our case."

Liz Bowyer, spokeswoman for SICO, issued a statement saying: "We are gratified by the jury's quick and complete vindication of Starr International and Mr. Greenberg and the jurors' quick and complete rejection of the outrageous personal attacks on Mr. Greenberg's character by AIG and its counsel."