American International Group Inc. won approval from a Delaware Chancery Court judge for a $90 million settlement of a shareholder lawsuit to be funded by the company’s insurers.
The so-called derivative suit was originally filed by investors in 2004 against executives and directors on behalf of AIG. In July, the company paid $725 million to investors who lost money when the insurer’s stock plunged amid a 2004 investigation into bid rigging and faulty accounting.
Today’s settlement is “an incentive for real litigation” with “a lot of high-quality lawyering,” said Judge Leo Strine Jr. at a hearing. He awarded lawyers $21 million in fees and expenses from the settlement fund, adding, “I’m not going to quibble at all with the fee.”
Shareholder suits filed in different courts claimed former top executive Maurice “Hank” Greenberg and other officials manipulated company accounts to conceal problems at AIG. The lead case was in Delaware.
AIG, not shareholders, will get the money. A separate $60 million in insurance proceeds is going to Greenberg and former AIG Vice Chairman Howard Smith to reimburse them for legal costs, according to court papers and an AIG regulatory filing.
In 2008, AIG accepted a U.S. government bailout of more than $180 billion.
The derivative case is American International Group Inc. Consolidated Derivative Litigation, CA769-VCS, Delaware Chancery Court (Wilmington).
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