American International Group Double Derivative Litigation
Ticker Symbol:
NYSE: AIG
Practice:
Securities Fraud & Shareholder Litigation
Phase:
Current Chimicles & Tikellis LLP has filed a double derivative action on behalf of AIG Financial Products Corp. ("AIG-FP" or the “Company”), in the Court of Chancery of the State of Delaware. The lawsuit alleges that Defendant Joseph Cassano, AIG-FP’s former President and Chief Executive Officer steered AIG-FP’s business deep into excessively risky transactions involving high-risk subprime-backed credit default swaps (“CDSs”) and collateralized debt obligations (“CDOs”), in order to enrich himself at the expense of AIG-FP and its sole stockholder, American International Group, Inc. (“AIG”). Further, as AIG-FP’s sub-prime exposure ballooned, Cassano short-circuited warnings within AIG-FP and hid AIG-FP’s ballooning exposure from the public markets. The lawsuit further alleges that as a result of Cassano’s breaches, AIG not only posted staggering losses, much of which was attributed to AIG-FP’s ultimate $33 billion in losses, but also suffered further damage from lawsuits, loss of market confidence and credit downgrades. The lawsuit seeks to recover damages and obtain disgorgement of unjust profits from for breaches of Cassano’s duty of loyalty to AIG-FP.
The lawsuit alleges that Cassano is liable to AIG-FP for breaching his fiduciary duty of loyalty by engaging in selfish misconduct. The lawsuit further alleges that demand on the AIG board is excused due to its failure to provide adequate oversight of Cassano’s decisions to invest in overly risky CDO’s and CDS’s in spite of the many red flags and allowing Cassano to retire from AIG without cause and receive a lucrative compensation package.
On July 17, 2009, Plaintiffs filed Verified Amended Double Derivative Complaint, a copy of which is available below. On August 5, 2009, the Court of Chancery stayed the consolidated action in favor of those pending in New York.
| Attachment | Size |
|---|---|
| File Stamped Complaint.pdf | 580.87 KB |
Attorneys to Contact:
Pamela S. Tikellis (PamelaTikellis@chimicles.com)
Meghan A. Adams (MeghanAdams@chimicles.com)
Scott M. Tucker (ScottTucker@chimicles.com)
P.O. Box 1035, 222 Delaware Ave, Suite 1100, Wilmington, DE 19801 Phone: 302-656-2500