AIG 2013 Annual Report Download - page 309

As of February 20, 2014, 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, we are unable to reasonably estimate the possible loss or range of
losses, if any, arising from the litigation.
Canadian Securities Class Action — Ontario Superior Court of Justice. On November 12, 2008, an
application was filed in the Ontario Superior Court of Justice for leave to bring a purported class action against AIG,
AIGFP, certain directors and officers of AIG and Joseph Cassano, the former Chief Executive Officer of AIGFP,
pursuant to the Ontario Securities Act. If the Court grants the application, a class plaintiff will be permitted to file a
statement of claim against defendants. The proposed statement of claim would assert a class period of March 16,
2006 through September 16, 2008 and would allege that during this period defendants made false and misleading
statements and omissions in quarterly and annual reports and during oral presentations in violation of the Ontario
Securities Act.
On April 17, 2009, defendants filed a motion record in support of their motion to stay or dismiss for lack of jurisdiction
and forum non conveniens. On July 12, 2010, the Court adjourned a hearing on the motion pending a decision by
the Supreme Court of Canada in a pair of actions captioned Club Resorts Ltd. v. Van Breda 2012 SCC 17 (Van
Breda). On April 18, 2012, the Supreme Court of Canada clarified the standard for determining jurisdiction over
foreign and out-of-province defendants, such as AIG, by holding that a defendant must have some form of ‘‘actual,’’
as opposed to a merely ‘‘virtual,’’ presence to be deemed to be ‘‘doing business’’ in the jurisdiction. The Supreme
Court of Canada also suggested that in future cases, defendants may contest jurisdiction even when they are found
to be doing business in a Canadian jurisdiction if their business activities in the jurisdiction are unrelated to the
subject matter of the litigation. The matter has been stayed pending further developments in the Consolidated 2008
Securities Litigation.
In plaintiff’s proposed statement of claim, plaintiff alleged general and special damages of $500 million and punitive
damages of $50 million plus prejudgment interest or such other sums as the Court finds appropriate. As of
February 20, 2014, the Court has not determined whether it has jurisdiction or granted plaintiff’s application to file a
statement of claim, no merits discovery has occurred and the action has been stayed. As a result, we are unable to
reasonably estimate the possible loss or range of losses, if any, arising from the litigation.
On November 21, 2011, Starr International Company, Inc. (SICO) filed a complaint against the United States in the
United States Court of Federal Claims (the Court of Federal Claims), bringing claims, both individually and on behalf
of the classes defined below and derivatively on behalf of AIG (the SICO Treasury Action). The complaint challenges
the government’s assistance of AIG, pursuant to which AIG entered into a credit facility with the Federal Reserve
Bank of New York (the FRBNY, and such credit facility, the FRBNY Credit Facility) and the United States received an
approximately 80 percent ownership in AIG. The complaint alleges that the interest rate imposed on AIG and the
appropriation of approximately 80 percent of AIG’s equity was discriminatory, unprecedented, and inconsistent with
liquidity assistance offered by the government to other comparable firms at the time and violated the Equal
Protection, Due Process, and Takings Clauses of the U.S. Constitution.
On November 21, 2011, SICO also filed a second complaint in the Southern District of New York against the FRBNY
bringing claims, both individually and on behalf of all others similarly situated and derivatively on behalf of AIG (the
SICO New York Action). This complaint also challenges the government’s assistance of AIG, pursuant to which AIG
entered into the FRBNY Credit Facility and the United States received an approximately 80 percent ownership in
AIG. The complaint alleges that the FRBNY owed fiduciary duties to AIG as our controlling shareholder, and that the
FRBNY breached these fiduciary duties by ‘‘divert[ing] the rights and assets of AIG and its shareholders to itself and
favored third parties’’ through transactions involving Maiden Lane III LLC (ML III), an entity controlled by the FRBNY,
and by ‘‘participating in, and causing AIG’s officers and directors to participate in, the evasion of AIG’s existing
Common Stock shareholders’ right to approve the massive issuance of the new Common Shares required to
complete the government’s taking of a nearly 80 percent interest in the Common Stock of AIG.’’ SICO also alleges
that the ‘‘FRBNY has asserted that in exercising its control over, and acting on behalf of, AIG it did not act in an
official, governmental capacity or at the direction of the Department of Treasury,’’ but that ‘‘[t]o the extent the proof at
or prior to trial shows that the FRBNY did in fact act in a governmental capacity, or at the direction of the
Department of Treasury, the improper conduct . . . constitutes the discriminatory takings of the property and property
rights of AIG without due process or just compensation.’’
Starr International Litigation
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AIG 2013 Form 10-K 291
ITEM 8 / NOTE 15. CONTINGENCIES, COMMITMENTS AND GUARANTEES
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