AIG 2011 Annual Report Download - page 326

American International Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On August 5, 2011, AIG and all other defendants filed answers to the consolidated complaint denying the
material allegations therein and asserting their defenses.
As of February 23, 2012, plaintiffs have not specified an amount of alleged damages, discovery is ongoing, and
the Court has not determined if a class action is appropriate or the size or scope of any class. As a result, AIG is
unable to reasonably estimate the possible loss or range of losses, if any, arising from the litigation.
Consolidated 2007 Derivative Litigation. On November 20, 2007 and August 6, 2008, purported shareholder
derivative actions were filed in the Southern District of New York naming as defendants directors and officers of
AIG and its subsidiaries and asserting claims on behalf of nominal defendant AIG. The actions have been
consolidated as In re American International Group, Inc. 2007 Derivative Litigation (the Consolidated 2007
Derivative Litigation). On June 3, 2009, lead plaintiff filed a consolidated amended complaint naming additional
directors and officers of AIG and its subsidiaries as defendants. As amended, the factual allegations include the
Subprime Exposure Issues and AIG and AIGFP employee retention payments and related compensation issues.
The claims asserted on behalf of nominal defendant AIG include breach of fiduciary duty, waste of corporate
assets, unjust enrichment, contribution and violations of Sections 10(b) and 20(a) of the Exchange Act. On
August 5 and 26, 2009, AIG and defendants filed motions to dismiss the consolidated amended complaint. On
December 18, 2009, a separate action, previously commenced in the United States District Court for the Central
District of California (Central District of California) and transferred to the Southern District of New York on
June 5, 2009, was consolidated into the Consolidated 2007 Derivative Litigation and dismissed without prejudice
to the pursuit of the claims in the Consolidated 2007 Derivative Litigation.
On March 30, 2010, the Court dismissed the action due to plaintiff’s failure to make a pre-suit demand on
AIG’s Board of Directors. On March 17, 2011, the United States Court of Appeals for the Second Circuit (the
Second Circuit) affirmed the Southern District of New York’s dismissal of the Consolidated 2007 Derivative
Litigation due to plaintiff’s failure to make a pre-suit demand.
On August 10, 2011 and August 15, 2011, the plaintiff that brought the Consolidated 2007 Derivative Litigation
sent letters to AIG’s Board of Directors (the Board) demanding that the Board cause AIG to pursue the claims
asserted in the Consolidated 2007 Derivative Litigation. On September 13, 2011, the Board rejected the demand.
Other Derivative Actions. Separate purported derivative actions, alleging similar claims as the Consolidated
2007 Derivative Litigation, have been brought asserting claims on behalf of the nominal defendant AIG in various
jurisdictions. These actions are described below:
•Supreme Court of New York, Nassau County. On February 29, 2008, a purported shareholder derivative
complaint was filed in the Supreme Court of Nassau County, naming as defendants certain directors and
officers of AIG and its subsidiaries. On March 9, 2009, this action was stayed.
•Supreme Court of New York, New York County. On March 20, 2009, a purported shareholder derivative
complaint was filed in the Supreme Court of New York County naming as defendants certain directors and
officers of AIG and recipients of AIGFP retention payments. The complaint has not been served on any
defendant.
•Delaware Court of Chancery. On September 17, 2008, a purported shareholder derivative complaint was
filed in the Delaware Court of Chancery, naming as defendants certain directors and officers of AIG and its
subsidiaries. On July 17, 2009 the case was stayed. On May 4, 2011, the parties filed a stipulation with the
court agreeing to lift the stay, and granting plaintiff leave to file an amended complaint. On June 17, 2011,
AIG filed a motion to dismiss the second amended complaint due to plaintiff’s failure to make a pre-suit
demand on the Board. On February 1, 2012, the Court approved a stipulation between the parties,
dismissing the second amended complaint with prejudice.
312 AIG 2011 Form 10-K