AIG 2010 Annual Report Download - page 337

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Court en banc. On December 29, 2010, the Delaware Supreme Court affirmed the Chancery Court’s decision
dismissing claims against AIG, General Re, Marsh, and ACE.
On February 5, 2010, a stipulation of dismissal was filed with the Court dismissing AIG’s direct claims against
Greenberg and Smith, pursuant to the AIG/Greenberg MOU. On February 10, 2010, the shareholder plaintiffs
informed the Court that they did not object to the dismissal of AIG’s direct claims against Greenberg and Smith,
but stated that the dismissal did not apply to their claim against Greenberg and Smith, and further stated that
they intended to seek attorneys’ fees for having initiated the claims against Greenberg and Smith. The Starr
Parties have taken the position that the AIG/Greenberg MOU releases the derivative claims being pursued by the
shareholder plaintiffs; AIG has taken the opposite position.
This action is also subject to the conditional settlement between the parties to the derivative actions, reached on
August 25, 2010 (see The New York 2004/2005 Derivative Litigation herein).
Derivative Action — Supreme Court of New York. On February 11, 2009, shareholder plaintiffs in the Delaware
2004/2005 Derivative Litigation filed a derivative complaint in the Supreme Court of New York against the
individual defendants who moved to dismiss the complaint in the Delaware 2004/2005 Derivative Litigation on
personal jurisdiction grounds. The defendants include current and former officers and employees of AIG, Marsh,
and General Re; AIG is named as a nominal defendant. The complaint in this action contains similar allegations
to those made in the Delaware 2004/2005 Derivative Litigation described above. Defendants filed motions to
dismiss the complaint on May 1, 2009. The shareholder plaintiffs have reached an agreement staying discovery as
well as any motions to dismiss the General Re and Marsh defendants pending final adjudication of any claims
against those parties in the Delaware 2004/2005 Derivative Litigation. The individual defendants have also filed
motions to dismiss. Pursuant to the stipulation of settlement executed by the parties (see The New York 2004/2005
Derivative Litigation herein), the Court denied all pending motions to dismiss as moot.
This action is also subject to the conditional settlement between the parties to the derivative actions, reached on
August 25, 2010 (see The New York 2004/2005 Derivative Litigation herein).
Derivative Action — Delaware Chancery Court (Marsh). AIG was also named as a defendant in a derivative
action in the Delaware Chancery Court brought by shareholders of Marsh. On July 10, 2008, shareholder plaintiffs
filed a second consolidated amended complaint, which contains claims against AIG for aiding and abetting a
breach of fiduciary duty and contribution and indemnification in connection with alleged bid-rigging and steering
practices in the commercial insurance market that are the subject of the Multi-District Litigation described below.
On November 10, 2008, AIG and certain defendants filed motions to dismiss the shareholder plaintiffs’ portions of
the complaint. On June 17, 2009, the Court dismissed the claims against AIG, Greenberg, and Zachary Carter
with prejudice and denied the motions to dismiss filed by the remaining defendants. The shareholder plaintiffs
filed their notice of appeal on October 1, 2009. AIG moved to consolidate the appeal with the appeal of the
dismissal of ACE, General Re, and Marsh in the Delaware 2004/2005 Derivative Litigation. The shareholders of
Marsh moved to stay this appeal pending the decision in the appeal of the dismissal of ACE, General Re, and
Marsh in the Delaware 2004/2005 Derivative Litigation. On November 10, 2009, the Delaware Supreme Court
granted AIG’s motion to consolidate the appeals for the purposes of oral argument and denied the Marsh
shareholders’ motion to stay. On February 22, 2010, the Court issued an order notifying the parties that the
appeal would be heard by the Court en banc.
On December 22, 2009, the Marsh shareholder plaintiffs filed a stipulation of settlement, resolving their claims
against the Marsh defendants.
On October 21, 2010, the Delaware Supreme Court asked the parties to brief the New York Court of Appeals’
answer to the certified question regarding the dismissal of PwC from the Delaware 2004/2005 Derivative Litigation
on the grounds of in pari delicto. The Delaware Supreme Court heard oral argument on the Marsh shareholders’
appeal against AIG on December 15, 2010, and on December 29, 2010, the Delaware Supreme Court affirmed the
Chancery Court’s decision dismissing claims against AIG.
In light of the decision by the Delaware Supreme Court, this matter has concluded without any liability to AIG.
AIG 2010 Form 10-K 321