The 84-year-old Greenberg, who built American International Group Inc (AIG.N), into the world’s largest insurer before he was ousted as CEO in March 2005, was asked by AIG lawyer Ted Wells why it took seven years for Starr’s acquisition of AIG stock in 1970 to be put in writing.
“That’s not quite correct, Mr Wells,” Greenberg said before a jury on his sixth day in the witness stand before U.S. District Judge Jed Rakoff in Manhattan federal court.
At the time, he said, there were just a few partners in a small affiliated company named C.V. Starr that Greenberg continues to run today.
“If one of us got hit by a car everyone knew our intentions. I don’t know why it took seven years.”
He said the understanding was that if anyone took restricted stock from Starr it would immediately go to the Starr Foundation.
In later questioning, Greenberg said the acquisition of stock was put in writing in 1977 “because one of our lawyers or accountants said there was a concern about the rule of perpetuity.”
Greenberg returns to the stand on Wednesday after Tuesday’s testimony, which was peppered with testy exchanges with Wells, who tried to undermine the executive’s credibility.
Attorney Ted Wells yesterday tried to show Greenberg, 84, lied earlier in federal court in New York about how his Starr International Co., or SICO, ran a deferred-compensation plan for top AIG workers and how it ended after his ouster in March 2005.
Wells questioned Greenberg about minutes of a May 2005 meeting that said SICO ended the retirement plan by “mutual agreement” of AIG, the New York-based insurer. Wells contends SICO, then based in Bermuda, unilaterally ended the plan out of spite after Greenberg’s ouster amid an accounting scandal.
“Is it the truth that the reference to a mutual agreement between SICO and AIG is a false statement?” Wells asked Greenberg in his fifth day of testimony. “Not to my knowledge, it’s not,” Greenberg said.
Wells went through a series of documents that he said showed that SICO didn’t reach the agreement in consultation with AIG. Greenberg acknowledged that he didn’t speak with his successor, former CEO Martin Sullivan, or with his replacement as chairman, former director Frank Zarb.