Starr rests case against AIG with Sullivan testimony
NEW YORK (Bloomberg) - Maurice 'Hank' Greenberg's Starr International Co. rested its case against American International Group Inc. (AIG) by playing excerpts of videotaped testimony from Martin Sullivan, the insurer's former CEO.
The presenting of evidence concluded on Friday in the trial of AIG's $4.3 billion in claims against Starr, which began June 15 before US District Judge Jed Rakoff in Manhattan.
AIG claims that Mr. Greenberg, after being ousted from the company in 2005, improperly took, or converted, 290 million AIG shares that Starr held for decades in a 'trust' to fund a deferred compensation programme for AIG employees.
AIG, which rested its case on June 25, contends Starr, or SICO, ended the retirement plan in retaliation for Mr. Greenberg's ouster and violated its duty to continue paying top AIG executives. The jury today heard Starr's lawyer, David Boies, question Mr. Sullivan during a May 24, 2006, deposition.
"Did you ever recall Mr. Greenberg talking about a trust agreement?" Mr. Boies asked Mr. Sullivan, who took over the top post at AIG after Mr. Greenberg's departure.
"To the best of my knowledge, no sir," Mr. Sullivan said.
"And insofar as you are aware, no one at AIG ever wrote to SICO saying, in words or substance, 'We would like you to fulfill the 2005, 2006'" compensation plan, Mr. Boies said.
"To the best of my knowledge, I'm unaware of any written correspondence in that regard," Mr. Sullivan said.
AIG, formerly the world's largest insurer, was run for almost four decades by Mr. Greenberg, 84. Mr. Sullivan headed the New York-based company for three years until being ousted after two record quarterly net losses.
"Once you became CEO of AIG, did you ask SICO to provide any written confirmation that these shares were held in trust?" Mr. Boies asked.
"Not that I recall, sir," Mr. Sullivan said.
SICO sued AIG in 2005, seeking the return of $15 million in artwork and other property. The claims on trial were filed by AIG as counterclaims to SICO's suit.
Mr. Rakoff told jurors today that they will hear summations from both sides tomorrow and be instructed on the law and begin their deliberations on July 7. The panel will be asked to render an advisory opinion to the judge on the claim that relates to whether Starr breached its duty to the insurer, Mr. Rakoff ruled.
Mr. Rakoff said on Friday he had not decided how he would handle Starr's request to dismiss AIG's breach-of-trust claim.
AIG has said it will use proceeds of any judgment to help repay the $182.5 billion bailout package it received from the federal government.