American International Group’s litigation against its former CEO Hank Greenberg has been very, very good to Boies, Schiller & Flexner (the Greenberg team) and Paul, Weiss, Rifkind, Wharton & Garrison (the AIG team). How good? As part of the settlement that the parties reached last Wednesday, AIG agreed to pay up to $150 million to cover certain legal fees and expenses incurred by Greenberg and former AIG CFO Howard Smith. And that $150 million doesn’t include the amount that AIG spent in this litigation.
The settlement puts an end to all litigation — a total of five suits — between AIG, Greenberg and the entities he controls, and Smith. Under the terms of this settlement, AIG is liable for legal fees that are “indemnifiable” and that relate to issues on which Greenberg and Smith have been successful as defined under Delaware law. Mediator Layn Phillips of Irell & Manella will determine which fees meet this test, and will also review fees for reasonableness. Daniel Kramer of Paul Weiss represented AIG in the settlement; Greenberg had David Boies; and Smith used Vincent Sama of Winston & Strawn.
