In Suit, Greenberg’s Agency Charges AIG Employees Out to Destroy Business

August 7, 2006

Former American International Group CEO Maurice Greenberg’s company has filed suit charging that senior executives at AIG are trying to steal employees, customers and trade secrets and ultimately destroy C.V. Starr and its agencies, which Greenberg now heads.

The suit is the latest ugly turn in a raging legal and business war between AIG and C.V. Starr & Co.

Subsidiaries of C.V. Starr & Co., Inc., including Starr Tech, Starr Aviation, C.V. Starr & Co. (Calif.) and American International Marine Agency (AIMA), collectively filed suit against three employees of AIG and up to 100 alleged co-conspirators claiming that the three attempted to “systematically destroy” the Starr Agencies’ businesses.

The complaint alleges that after AIG failed in its bid to buy the Starr Agencies in 2005, it proceeded with efforts to try to destroy Starr.

C.V Starr is seeking punitive damages, recoupment of any funds illegally generated by the defendants, and an order permanently enjoining the defendants from using proprietary and confidential information of the Starr Agencies.

“This lawsuit exposes a string of illegal activity at AIG designed to eliminate the C.V. Starr Agencies,” maintained Howard Opinsky, a spokesman for C.V. Starr & Co., Inc.

The lawsuit alleges that two former employees and the former vice chairman of C.V. Starr & Co., Inc. subsidiaries who are now employed at AIG misappropriated confidential and proprietary information, raided employees of Starr Tech and other C. V. Starr & Co., Inc. subsidiaries and attempted to discredit the Starr Agencies in the marketplace.

The complaint maintains that the defendants “intentionally interfered with plaintiffs’ current and prospective business relations and expectancies with their employees, tortiously interfered with the present and prospective business relations with plaintiffs’ clients and customers, unfairly competed with plaintiffs, and misappropriated plaintiffs’ trade secrets.”

The complaint targets Ralph Mucerino, president of AIG Global Energy, who used to be vice chairman of Starr Tech; Warren Meigs, who resigned as Starr Tech’s regional vice president in Hartford in January to join AIG; and Robert Kuchniski, formerly senior vice president at Starr Tech, now senior vice president at AIG Global.

The remaining defendants are unidentified officers, directors and employees of AIG and its affiliates.

The suit claims that the former Starr employees violated the C.V. Starr code of ethics which prohibits the disclosure of trade secrets and proprietary information.

It further reveals that during the summer and fall of 2005, AIG attempted to purchase all of the Starr Agencies but those negotiations ended in October “because AIG refused to pay a fair market price for C.V. Starr.”

The complaint maintains that after the sale negotiations ended, AIG never responded to a C.V. Starr proposal to extend managing general agency agreements between each Starr Agency and the respective insurers.

“The defendants knew that if AIG were to stop doing business with the Starr Agencies, it would lose substantial sources of business, expertise and customer relationships,” says the complaint, alleging that since AIG could not buy the Starr business, the defendants set out to steal it instead.

Starr lawyers say AIG defendants raidd as many as 70 employees from Starr Tech and even went so far as to lock employees out of their offices.

Other allegations in the suit include:

AIG employees misappropriated the company’s market influence to unlawfully intimidate Starr Tech clients.

AIG employees misappropriated Starr Aviation files and documents and communicated improper information to Starr’s customers.

AIGA (AIG’s newly formed aviation agency) employees interfered with accounts.

AIG employees posted signs in C.V. Starr office space and sent emails to AIG employees offering $2,000 reward for poaching Starr Agencies’ employees.

AIG employees pressured C.V. Starr employees to sign AIG employment contracts or face consequences including immediate removal from the premises.

AIG employees prevented C.V. Starr employees from accessing their offices.

AIG employees ordered C.V. Starr & Co. (California) signage removed from their main sign to make it appear as though the company did not exist.

Asked for response to the lawsuit, an AIG spokesperson said the company does not comment on litigation.

The suit was filed in New York State Court by attorneys from Boies, Schiller & Flexner LLP and a lawyer from Skadden, Arps, Slate, Meagher & Flom.

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