Under the terms of the settlement, the parties have agreed to release each other from all claims, including any claims by Greenberg and Smith against AIG for indemnification of future legal fees and expenses or settlement costs, according to the AIG release. The parties have further agreed to submit to an independent third party Greenberg's and Smith's claims for past legal fees and expenses for a determination of which of those fees (up to a $150 million cap) AIG is legally obligated to pay under AIG's charter and by-laws and Delaware law.
"We are pleased that we have resolved our differences," commented Robert Benmosche, AIG's chief executive officer. "The resolution of these long-running disputes will remove a significant distraction and expense and allow AIG to better focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders."
The AIG press release quotes Greenberg as saying, "I too am pleased that these long-running disputes are now over, and I want to express my appreciation for Bob Benmosche's help, and the help of the AIG Board, in resolving them. I look forward to assisting AIG in trying to preserve and restore as much value as possible for all of AIG's stakeholders."
The details of the settlement are set forth in the November 25, 2009 Memorandum of Understanding attached to AIG's Form 8-K filing dated November 25, 2009, according to the AIG source.
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