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AIG is at war with ex-chief

AIG began a legal fight with former boss Maurice Greenberg in a New York federal court yesterday, in a bitter fight over disputed assets worth $4.3bn (&pound;2.6bn).<br /><br />Greenberg, chairman of privately-held Starr International, is accused by AIG of snatching the assets unlawfully in 2005. He is due to take the stand to testify this week.<br /><br />Fighting the corner of recession-battered AIG is legal veteran Theodore Wells of New York firm Paul, Weiss, Rifkind, Wharton &amp; Garrison, which recently won a $364m case for Citigroup against Italian food group Parmalat.<br /><br />Working for Starr is David Boies, chairman of Boies, Schiller &amp; Flexner. He is known for winning $2.25bn from Visa and $1.8bn from MasterCard for American Express in some of the biggest civil antitrust cases ever fought.<br /><br />The battle has become politicised, with AIG now saying it would use the proceeds to repay some of its $17bn taxpayer bailout, after previously suggesting any gains would be used for staff payouts. Meanwhile, Starr has given $1.5bn to good causes in the last week, to help cement its charitable credentials.<br /><br />Greenberg ran Starr &ndash; which was given 300m shares in AIG when it was formed in 1970 &ndash; alongside AIG during his 37-year tenure as chief executive.<br /><br />When he was ousted from AIG in 2005 amid an accounting scandal, he retained control of Starr and sold off most of the shares, raising $4.3bn shortly before the market collapsed and rendered AIG&rsquo;s stock practically worthless.<br /><br />AIG contends the shares were owed to it, as they were part of a trust it established to pay bonuses to top staff. Starr says no such trust existed. The case continues.<br /><br /><strong>1919</strong><br />
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<div>Edwin Cornelius Vander Starr founds AIG in China and builds it into a global insurance giant.<br /><br /><strong>1949</strong></div>
<div>Starr moves the company&rsquo;s&nbsp;headquarters to New York as the Communist People&rsquo;s Liberation Army marches on Shanghai.<br /><br /><strong>1962</strong><br />Starr names Hank Greenberg boss of the group&rsquo;s underperforming US holdings. Greenberg shifts the focus to higher-margin&nbsp;</div>
<div>corporate insurance work.<br /><br /><strong>1968</strong><br />Starr names Greenberg as his&nbsp;successor a year before his death. AIG is listed on the stock exchange a year after that.<br /><br /><strong>1970</strong><br />Starr International is created and given 300m AIG shares.<br /><br /><strong>2005</strong><br />AIG faces fraud investigations amid an accounting scandal. Greenberg resigns and is replaced by Martin Sullivan, but he retains control of Starr International and starts selling its AIG shares.&nbsp;</div>
<div><br /><strong>2008</strong><br />Greenberg begins a legal attack on AIG, claiming it is holding a $15m art collection and other property belonging to Starr International.<br /><br /><strong>2008</strong><br />AIG finds itself in a liquidity crisis that brings it near to collapse, after investing in toxic assets. Edward Liddy becomes chief exec.<br /><br /><strong>2009</strong><br />AIG and Starr International enter a legal battle over the $4.3m Starr made from selling AIG shares the insurer says it was owed.&nbsp;</div>
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