American International Group (AIG) escalated its battle with former chief executive Maurice "Hank" Greenberg by suing for control of roughly $20 billion in AIG shares, it was reported yesterday.

In papers filed in federal court in Manhattan late Tuesday, the New York-based company said Greenberg must give up control of stock representing nearly 12 percent of the insurance giant held by Starr International, a private Bermuda-based firm whose chief asset is the AIG stake.

In its suit, AIG says it is entitled to the shares because there is "a long-standing agreement between AIG and Starr International to retain and use such shares for the benefit of AIG and AIG employees".

AIG and Greenberg have been battling to unwind ties between the insurer and Starr.