AIG settles legal battle with Hank Greenberg

The former chairman and the insurance giant release each other from future legal fees and agree to submit past claims to a third party.

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NEW YORK (CNNMoney.com) -- AIG said Wednesday it agreed to settle long-standing legal disputes with the insurance giant's former chairman, Maurice "Hank" Greenberg.

The parties have agreed to release each other from all claims, including those by Greenberg against AIG (AIG, Fortune 500) for payments of future legal fees and expenses or settlement costs, according to a Securities and Exchange Commission filing by AIG.

The settlement also gives Greenberg photographs of himself with notable figures, including one with Chinese leaders that is in AIG's Shanghai office.

Greenberg will also get a Persian rug that was previously in a board room of AIG's Pine Street office in New York.

AIG will also allow Greenberg access to archived material to write his memoir.

The deal also covers former AIG chief financial officer Howard Smith, as well as Greenberg's privately-held companies, C.V. Starr & Co. and Starr International Company Inc.

The two sides also agreed to submit Greenberg and Smith's past claims for AIG's payment of legal fees and expenses to a third party, Layn Phillips of Los Angeles-based law firm Irell & Manella, to determine how much AIG is legally obligated to pay. The amount is capped at $150 million.

"We are pleased that we have resolved our differences," said AIG's chief executive office Robert Benmosche in a statement. "The resolution of these long-running disputes will remove a significant distraction and expense and allow AIG to better focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders."

Greenberg and Smith agreed that they are satisfied the long-standing disputes have been resolved, according to the filing.

"I too am pleased that these long-running disputes are now over, and I want to express my appreciation for Bob Benmosche's help, and the help of the AIG Board, in resolving them." Greenberg said. "I look forward to assisting AIG in trying to preserve and restore as much value as possible for all of AIG's stakeholders."

Greenberg, 83, was ousted from his post as AIG's chief executive in 2005 amid a probe by then-New York Attorney General Eliot Spitzer for accounting fraud.

The following year, the SEC charged AIG with securities fraud and improper accounting. The company settled the charges by repaying $700 million plus a fine of $100 million. In August, Greenberg agreed to pay $15 million. To top of page

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