American International Group (AIG) escalated its battle with former chief executive Hank Greenberg by suing for control of roughly $20 billion in AIG shares, the Wall Street Journalreported today.
The New York-based company said Mr Greenberg must give up control of stock representing nearly 12 per cent 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 longstanding agreement between AIG and Starr International to retain and use such shares for the benefit of AIG and AIG employees, the paper reported.
According to the suit, Starr awarded about 33.1 million shares in AIG to around 700 AIG employees, more than 22 million of which have not yet been distributed.
After he was forced to retire this spring amid mounting state and federal investigations of AIG's accounting, Mr Greenberg maintained control of the offshore entity as chairman.
AIG and Mr Greenberg (80) have battled to unwind ties between the insurer he headed for nearly four decades and Starr, an investment firm named after AIG founder Cornelius Vander Starr.
Starr was for long run by AIG executives and paid bonuses to AIG employees, a practice that allowed AIG to reward executives at no cost to its shareholders.