Monday, July 13, 2009

AIG Bonus Fund Stays in Foundation

Some years ago, Starr International Company was created, its assets used primarily to pay bonuses to employees of AIG.  The boards of the two companies - AIG and Starr - were the same, and Maurice R. Greenberg headed both companies.  IN 2005 Greenberg was forced out of AIG, and shortly therefore he ended the bonus plan. In 2006 the assets of Starr International Company were transferred to Star International Foundation, which now owns Starr International Company.  The Foundation makes charitable grants and has made over $27 million in grants since it was created.  


The Chronicle of Philanthropy describes the outcome of a federal jury trial that determined that assets were not improperly removed from the AIG bonus plan and transferred to the Foundation.  Starr produced documents that showed that the funds had "long been held in a charitable trust" and that the assets held in the charitable trust were transferred to the Foundation, but the article does not explain the connections between the charitable trust and the bonus plan.

The judge will issue a final ruling, taking the jury's decisions into consideration, by the end of August.

sng

http://lawprofessors.typepad.com/nonprofit/2009/07/aig-bonus-fund-stays-in-foundation.html

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