Legal News

A Matchup Made in Heaven: David Boies v. Ted Wells

By Ashby Jones

It’s not exactly Ali v. Frazier, but in the legal world, it’s close. On Monday, in a Manhattan federal court, famed litigator David Boies (of Boies, Schiller & Flexner), will square off against famed litigator Ted Wells (of Paul Weiss and the Law Blog Moustache Society). The lawsuit involves . . . who really cares? It’s Ted Wells and David Boies!

We jest. The suit consists of a long-running legal battle between beleaguered insurer American International Group and Starr International Co., an investment firm led by AIG’s former chief executive, “Hank” Greenberg. Boies is repping Starr and Wells (pictured), AIG.

Some $4.3 billion is at stake. At issue are tens of millions of shares Starr International Co. holds in AIG, as well as tens of millions of shares Starr sold in recent years.

For decades while Greenberg was at AIG’s helm, the shares were used to fund a long-term compensation plan for AIG employees. But after he left in 2005, amid an investigation of AIG’s accounting, the program ended and Starr, which is privately held, began using the funds for other purposes, including investments. AIG says it should control the shares.

Starr got the shares in question as the result of a 1970 reorganization of AIG and affiliated firms. AIG’s share price shot up as the company grew, and the stake was valued at roughly $17 billion when Greenberg left AIG. Starr sold many AIG shares in 2006 and 2007, when the price was far higher. Those sales generated more than $4 billion. AIG is expected to argue that it should get that money, plus other disputed shares that Starr still holds.

Click here for the story in Friday’s WSJ.

If the prospect of Ted Wells and David Boies hurling objections at each other isn’t enough to make you howl at the moon, there’s more. Greenberg is expected to testify, which could be good theater. Presiding over it all is well-regarded Manhattan federal judge Jed Rakoff.

Photo: Bloomberg News

Full post as published by Law Blog - WSJ.com on June 12, 2009 (boomark / email).