BYLINE: Fran Lysiak
DATELINE: NEW YORK
An American International Group Inc. insurance company has agreed to pay $1.1 million to settle a lawsuit filed by the City of Glendale, Calif., to try to recover millions it had to spend following a destructive mudslide in 2005.
“We confirm the settlement of $1.1 million for four separate landslides that occurred in 2005 after a major storm,” said Jim Ankner, a spokesman for AIG (NYSE: AIG), who couldn’t immediately confirm the name of the AIG subsidiary that was sued. “We are pleased this matter is resolved.”
Attempts to speak with the City of Glendale were unsuccessful.
Glendale sued the AIG company in 2009 to recover the costs related to damage claims filed by several homeowners that eventually made the city liable for a reported $12.1 million. The city believed its insurance policy covered the money it spent on the damage from the mudslide but AIG disagreed.
During the financial crisis of 2008, the federal government stepped in to save AIG from failing by authorizing a bailout of up to $182 billion, although AIG said it never borrowed that full amount. The company said government support has been reduced by 83%, or $152 billion, through paying back loans and other types of support. The outstanding federal support of AIG is the U.S. Treasury still owning 1.06 billion shares, or about 81%, of outstanding AIG stock (Best’s News Service, July 17, 2012).
Most of AIG’s insurance subsidiaries currently have Best’s Financial Strength Ratings of A (Excellent). Shares of AIG were trading midday July 24 at $30.25, down 1.40% from the previous close.
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