Settlement Alert: AIG

In re American International Group, Inc. 2008 Securities Litigation, No. 08-CV-4772-LTS-DCF (S.D.N.Y.)

Barrack, Rodos & Bacine is pleased to announce that the Court has granted final approval of a $970.5 million settlement of In re American International Group, Inc. 2008 Securities Litigation, in which the firm served as a Lead Counsel on behalf of the Court-appointed Lead Plaintiff, the State of Michigan Retirement Systems, as custodian of the Michigan Public School Employees’ Retirement System, the State Employees’ Retirement System, the Michigan State Police Retirement System, and the Michigan Judges Retirement System.   

Background

In re American International Group, Inc. 2008 Securities Litigation was a securities class action lawsuit filed in the United States District Court for the Southern District of New York before the Honorable Laura Taylor Swain, alleging, among other things, that the defendants (identified in footnote 2 of the Notice of Class Action, Proposed Settlement, Motion for Attorneys’ Fees and Expenses, and Settlement Hearing) violated the federal securities law by misrepresenting and concealing the full extent of American International Group, Inc.’s exposure to the U.S. subprime residential mortgage market. Click here for a copy of the Notice.  The case has been resolved on behalf of a Settlement Class consisting of all persons (a) who purchased certain AIG securities on a U.S. public exchange during the period from March 16, 2006 through September 16, 2008 (“Class Period”) or (b) who purchased or acquired certain AIG securities in or traceable to a public offering during the Class Period.  Included in the Settlement Class are purchasers of the following securities:  AIG common stock; corporate units issued in May 2008; two series of subordinated debentures issued in June 2007 (Series A-4) and in December 2007 (Series A-5); and six major bond offerings between October 2006 and December 2007. Also included are purchasers of approximately 60 other bond and structured note offerings made during the Class Period, many of which were much smaller in size and sold to a limited number of investors.  A copy of the Consolidated Class Action Complaint in this action, filed on May 19, 2009, by Lead Counsel on behalf of the Lead Plaintiff, is available here.

After more than six years of intensive litigation, including the completion of all fact witness discovery and full briefing, an evidentiary hearing, and argument on Lead Plaintiff’s motion for class certification, the parties settled the case for $970.5 million in cash, which was paid into an interest-earning escrow account on behalf of the proposed Settlement Class.  The settlement was the result of negotiations spanning more than two years, assisted by mediator Layn Phillips, a former U.S. District Court Judge.  The settlement resolves all claims of Settlement Class members against AIG and the other Released Defendants (as defined in the Notice).  A copy of the Stipulation and Agreement of Settlement, dated September 12, 2014, is available here.  On October 7, 2014, the Court granted a motion for preliminary approval of the settlement.  Click here for a copy of the Court’s preliminary approval order.  On March 20, 2015, the Court entered a Judgment and Order granting final approval to the settlement and an order approving the proposed Plan of Allocation.  Click here for a copy of the Court's Judgment and Order finally approving the settlement.  Click here for a copy of the Order Approving Lead Plaintiff's Proposed Plan of Allocation.

The settlement is among the largest recoveries ever achieved in a securities fraud class action stemming from the 2008 financial crisis.  It also is one of the largest ever achieved in the absence of a criminal indictment or an SEC enforcement action. 

The Notice explains important rights that members of the Settlement Class have, including how to become eligible for a possible distribution from the settlement.  The legal rights of all Settlement Class members will be affected by the settlement. We encourage you to read the Notice carefully. 

To obtain a payment from the Settlement:

If you are a member of the Settlement Class, to be eligible to obtain a payment from the settlement, you must fill out, sign and send to the Claims Administrator, postmarked no later than May 5, 2015, a Proof of Claim and Release Form.  The Proof of Claim and Release form is available here.  You may also obtain a copy of the Proof of Claim and Release Form from the AIG, Inc. 2008 Securities Settlement Claims Administrator, c/o Gilardi & Co. LLC, P.O. Box 8040, San Rafael, CA 94912-8040; or by calling the following toll-free number maintained by the Claims Administrator: 1-888-283-6985 (or outside the U.S. and Canada call 1-317-324-0388). Additional information can be found at the official settlement website: www.AIG2008SecuritiesSettlement.com.

ATTENTION PURCHASERS OF SERIES AIG FP SECURITIES:  Exhibit A to the Notice of Class Action, Proposed Settlement, Motion for Attorneys' Fees and Expenses, and Settlement Hearing has been revised by Court Order.  The revised Exhibit A is available here and in the Important Documents section of this webpage.

To find out more information about the Action and the Settlement:

Additional information about the action and the settlement are provided in the Notice issued pursuant to the Court’s order granting preliminary approval of the settlement, a copy of which is available here.  You may also obtain a copy of the Notice from the Claims Administrator at www.AIG2008SecuritiesSettlement.com or by calling the Claims Administrator’s toll-free number provided above.

The firm’s answers to Frequently Asked Questions are available here.  NOTE: The Notice is the Court-approved document that explains the action, the settlement and the rights of Settlement Class members with respect to the action and settlement.

The firm’s announcement of the settlement after it was reached in principle is available here.  The firm's announcement of the Court's final approval of the settlement is available here.