Failure in Federal court does not stop New York state action

AIG will pursue its state-court action against Maurice “Hank” Greenberg after a federal jury found Greenberg’s Starr International (Sico) wasn’t liable for taking $4.3 billion in AIG shares, Bloomberg reports.

AIG lawyer Roberta Kaplan said the insurer would continue its case against Greenberg and six other former AIG executives, including ex-chief financial officer Howard Smith.

The state case, filed in New York State Supreme Court in Manhattan in 2008, alleges Greenberg and the other defendants breached their fiduciary duty as AIG’s former directors.

Federal case disappointment

“While we’re disappointed with the (Federal Court) verdict, AIG intends to continue to proceed forward with this case which relates to breaches by Mr. Greenberg and others of their fiduciary duty to AIG and its shareholders,” Kaplan said. She spoke after a hearing in New York State Supreme Court in Manhattan.

AIG will have no value

In a separate story, Bloomberg said Citigroup had warned that if AIG pays back the US government in full there will be no value left for shareholders. “Our valuation includes a 70% chance that the equity at AIG is zero,” said Joshua Shanker, an analyst at Citigroup, in a note to investors cutting his price target on the New York-based insurer by more than half.