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Chancery Court Allows Claims To Proceed Against Greenberg, Other AIG Directors

By Francis G. X. Pileggi, Esq.

American International Group, Inc., Consolidated Derivative Litigation; AIG, Inc. v. Greenberg, et al., 2009 Del. Ch. LEXIS 15 (Feb. 10, 2009), read opinion here.

This Chancery Court decision denied a Motion to Dismiss breach of fiduciary duty claims against former AIG Chairman Maurice "Hank" Greenberg and other AIG directors in connection with the long list of claims relating to AIG's need to restate years of  financial statements, and related losses of billions of dollars in stockholder value. The opinion is 104-pages long in the original slip op.  format  and could easily be the subject of a law review article, but pressing client matters allow me only to identify the decision at this time. I hope to come back to it later.

Notably, the  defendant officers were dismissed on jurisdictional grounds in large part because the claims originated before the Delaware statute was changed to allow jurisdiction in Delaware to be more easily imposed against officers. Also, the auditor, PricewaterhouseCoopers, was dismissed based on the application of New York law (in light of the substantial relationship test for choice of law), and New York law apparently required dismissal of the claims against them.

More to follow on this interesting and long opinion.

Full post as published by Delaware Corporate and Commercial Litigation Blog on February 19, 2009 (boomark / email).