The Firm represented the Board of Directors of the American International Group, Inc. (“AIG”) (NASDAQ: AIG) in connection with the Board’s review of a shareholder demand requesting that the Board pursue lawsuits against the U.S. Federal Government and the Federal Reserve Bank of New York (“FRBNY”) alleging wrongful conduct by the Government and FRBNY in connection with the rescue of AIG in Fall 2008. The demand was submitted by Starr International Company, Inc., whose Chairman, Maurice R. Greenberg, previously served as Chairman and CEO of AIG. In its demand, Starr contended that, as part of the rescue, the federal government and FRBNY unlawfully took or “illegally exacted” a 79.9 percent equity interest in AIG in connection with FRBNY’s $82 billion credit facility and improperly took funds in connection with a transaction known as Maiden Lane III. The demand contended that AIG incurred damages in excess of $23 billion. Starr asked the Board to either pursue the claims itself or permit Starr to pursue them on behalf of the company.
As counsel to the Board, Simpson Thacher advised the Board regarding its obligations in connection with Starr’s demand and helped the Board assess the merits of Starr’s claims. On January 9, 2013, the Board heard oral presentations from Starr, FRBNY and the Department of Treasury regarding Starr’s demand. After the presentations, the Board voted to refuse Starr’s demand in its entirety.
A lawsuit asserting direct claims by Starr against the federal government is currently pending before Judge Thomas C. Wheeler in the Court of Federal Claims. A parallel lawsuit against the FRBNY was dismissed by Judge Paul A. Engelmayer of the Southern District of New York in November 2012.
The Simpson Thacher team includes Paul Curnin, Michael Nathan, Michael Garvey, Craig Waldman, Elizabeth Warnick, Shannon Torres, Christopher Caputo, Jordan Botjer and Nicholas Barker.