Posted on 14 Dec 2010
A shareholder lawsuit settlement with American International Group Inc. (AIG) will go forward now that the firm's insurers have agreed to fund the $90 million agreement.
Attorney Felipe Arroyo, who is representing the shareholders in the lawsuit, sent a letter to NY U.S. District Judge Denise Cote saying that the settlement announced in August was dependent on insurance funding. “The August 25 agreement was conditioned on funding by the directors and officers insurance carriers,” according to the letter. As of Dec. 8, those insurers “have funded the agreed-upon settlement amount of $90 million into an escrow account,” Arroyo wrote.
The so-called derivative suit was filed by investors 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.
AIG is “pleased the matter was satisfactorily resolved and we continue to focus on our task of repaying the American taxpayers,” Mark Herr, a spokesman for AIG, said in an e-mail.