Berkshire's Gen Re, Marsh win AIG suit dismissal
NEW YORK (Reuters) - Berkshire Hathaway Inc's (BRKa.N) (BRKb.N) General Re Corp and other companies have won dismissal of lawsuit accusing them of helping American International Group Inc (AIG.N) defraud investors.
Judge Leo Strine of the Delaware Chancery Court rejected AIG shareholder claims that officials at the reinsurer General Re, insurance broker Marsh & McLennan Cos (MMC.N) and insurer Ace Ltd (ACE.N) conspired with AIG officials including former Chairman Maurice "Hank" Greenberg to overstate AIG's finances.
In February, the judge had ruled that Greenberg and other former AIG executives could be sued over alleged misconduct.
Shareholders had alleged that AIG engaged in nearly one dozen conspiracies to bolster its financial position by billions of dollars, and which made it complicit in illegal schemes to rig bids for insurance contracts.
But in a 38-page opinion dated on Wednesday, Strine said it was inappropriate for AIG's shareholders to recover against other alleged corporate conspirators.
The judge said trying to apportion responsibility would subject courts to "extremely complex economic and fault-finding" inquiries into alleged misconduct. He also said it could encourage companies try to shift to their "partners in crime" some of the costs of an exposed conspiracy.
"In this context there is no societal interest in making sure that each party gets its 'fair' share of the conspirators' societally unfair bargain," Strine wrote.
Stuart Grant, a lawyer for AIG shareholders, said in an interview: "We were not surprised about the decision, given the ruling in the February case. We are considering our alternatives."
Several former AIG and General Re executives, including former General Re chief Ronald Ferguson, have been sentenced to prison over a group of transactions in 2000 and 2001 that helped AIG boost loss reserves. Warren Buffett, who runs Berkshire, was not implicated.
The alleged insurance bid-rigging involving Marsh and Ace was first raised in 2004 by then-New York Attorney General Eliot Spitzer.
The case is In re: American International Group Inc Consolidated Derivative Litigation, Delaware Chancery Court (Wilmington), No. 769-VCS.
(Reporting by Jonathan Stempel)
