NU Online News Service, May 17, 2:00 p.m. EDT--American International Group has revealed in a regulatory filing that it plans to pay in advance legal fees and other related costs its directors may incur for pending lawsuits.
The New York-based insurance giant has been hit with a rain of lawsuits alleging management failure to prevent improper accounting had diminished AIG stock value.
According to AIG's Securities and Exchange Commission filing, the insurer has agreed to "advancement of expenses," which could include "attorneys' fees, actually and reasonably incurred by the director in the event that at any time he is or was a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative."
AIG stated that it wishes to "obligate itself" to make payments to the fullest extent authorized by the general corporation law in advance of the final disposition of any action, lawsuit or proceedings.
If an advancement of expenses is not made within 60 days after receiving a request by a director, "then the director may bring an action against AIG to recover the unpaid amount of the claim," AIG stated.
The AIG filing listed 13 directors who entered into the payment agreement on May 9. They are: M. Bernard Aidinoff, Pei-Yuan Chia, Marshall Cohen, William Cohen, Martin Feldstein, Ellen Futter, Stephen Hammerman, Carla Hills, Frank Hoenemeyer, Richard Holbrooke, George Miles Jr., Morris Offit and Frank Zarb.
Meanwhile, AIG was slapped with yet another class-action lawsuit, this time from the San Francisco Employees' Retirement System (SFERS).
San Francisco City Attorney Dennis Herrera made an announcement this week that he filed a class action on behalf of SFERS, charging AIG with "egregious business malfeasance and violations of federal securities law."
The suit was filed in U.S. District Court for the Southern District of New York. It comes on the heels of another class action, which was filed last week by Coral Springs, Fla.-based law firm Mager White & Goldstein LLP on behalf of beneficiaries of the AIG employees' 401(k) savings plan.
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