World and Nation

Ex-Chief of AIG Is Busy Building a New Venture

Maurice R. Greenberg, who built the American International Group into an insurance behemoth with an impenetrable maze of on- and offshore companies, is at it again.

Even as he has been lambasting the government for its handling of AIG after its near collapse, Greenberg has been quietly building up a family of insurance companies that could compete with AIG. To fill the ranks of his venture, C.V. Starr & Co., he has been hiring some people he once employed.

Now, Greenberg may have received some unintended assistance from the U.S. Treasury. Just last week, the Treasury severely limited pay at AIG and other companies that were bailed out by taxpayers. That may hasten the exodus of AIG’s talent, sending more refugees into Greenberg’s arms, since C.V. Starr is free to pay whatever it wants.

“Basically, he’s just starting ‘AIG Two’ and raiding people out of ‘AIG One,’” said Douglas A. Love, an insurance executive who has also hired AIG talent for his company, Investors Guaranty Fund of Pembroke, Bermuda.

While America generally loves stories of entrepreneurs making a comeback, Greenberg’s success may be at the expense of taxpayers. People who work in the industry say that if he is already luring AIG’s people, he may soon be siphoning off its business and, therefore, its means to repay its debt to the government.

“To me, it’s just going to be a matter of time before the valuation of what he’s building is greater than the valuation of AIG,” said Andrew J. Barile, an insurance consultant in Rancho Santa Fe, Calif.

AIG, meanwhile, is struggling to regain its footing. The recipient of the biggest taxpayer bailout in history, it has been ordered by the government to restructure, unwind its complex derivatives and pay back the taxpayers.

At 84, Greenberg remains larger than life. He spent nearly four decades forging AIG out of private companies, devising its Rubik’s Cube structure and building it into the world’s largest insurance group with a $1 trillion balance sheet. He lost most of his fortune when the company nearly collapsed last year.

And now, he appears to be starting over.

He was ousted from AIG in an accounting scandal in 2005, and has insisted that he was not responsible for the problems that almost brought down AIG last year — extremely risky trading in derivatives by its financial products unit. At the moment, C.V. Starr does not have a financial products unit, a spokesman for Greenberg said.

After he was pushed out, Greenberg fought bitterly with AIG over how to untangle assets that they both laid claim to. Over the summer, he won, earning the rights to $4.3 billion in AIG stock that he had removed from an unusual offshore retirement plan. The company had argued that he had improperly cashed out the stock and used the money to finance new business ventures that were competing with his former company.

With his battles with AIG now largely resolved, Greenberg is free to use that money as the seed for his latest ventures. Just this month, C.V. Starr leased 141,000 square feet of space — three stories — on Park Avenue in Manhattan, in one of Lehman Brothers’ old headquarters.