American International Group, Inc. v. Greenberg
New York Supreme Court
877 N.Y.S.2d 614 (2008)
- Written by Robert Cane, JD
Facts
American International, Inc. (AIG) (plaintiff) was a Delaware corporation with its headquarters in New York. AIG had maintained a deferred-compensation plan for its employees through Starr International Company, Incorporated (SICO) since 1970. SICO held shares of AIG to fund the compensation plan. Per a 1970 agreement among shareholders of SICO, AIG management would always control SICO for the benefit of AIG employees. Maurice Greenberg (defendant) was CEO of AIG. Smith, Matthews, Stempel, Murphy, Roberts, and Freeman (the executives) (defendants) were AIG directors and officers. Two of the executives and Greenberg resided in New York. None of the executives resided in Delaware. In 2005, Greenberg allegedly seized control of SICO and removed all of its board members. Then, allegedly at Greenberg’s direction, the executives decided that SICO would renege on and cancel its 2005/2006 deferred-compensation plan. Also, the executives allegedly caused SICO to sell AIG shares that were to be held for the benefit of AIG employees and to fund the compensation plan. AIG brought an action for breach of fiduciary duties against Greenberg and the other AIG executives in the New York Supreme Court. Stempel argued that Delaware was the most suitable forum for AIG’s action as AIG’s state of incorporation, and Stempel moved to dismiss the complaint for forum non conveniens.
Rule of Law
Issue
Holding and Reasoning (Ramos, J.)
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