width=139Though one of the last places 84-four-year-old Maurice Hank Greenberg, American International Group, Inc.'s (AIG) former chairman and CEO, might have wished to spend the summer months, a Manhattan courtroom has so far proven kinder to him than much of the last four years. Greenberg has been fighting a civil lawsuit filed against him by his former employer for the alleged misappropriation of 313 million shares of AIG stock owned by Starr International Company (SICO), a privately held company Greenberg controls.

On July 7, a federal jury ruled-after less than a day of deliberations-that Greenberg had not, in fact, stolen billions of dollars from AIG when the company and Greenberg's subsidiary split four years ago.

Though a victory for Greenberg, AIG is holding out hope that federal district court judge Jed Rakoff will overturn the jury ruling and agree with the insurance giant that Greenberg violated a trust when he removed and sold the stock. The judge, who has broad authority in the case, is expected to deliver his ruling by the end of August.

Former AIG executive and author Ron Shelp chronicles the path that ultimately led to this month's ruling in his book Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG, originally published in 2006 and an updated version is due out in paperback on August 31, 2009. The book interweaves Hank Greenberg's relentless pursuit to create the world's most powerful insurer with dramatic details such as meetings with high-powered government officials across the globe, kidnappings, the purchase of a ski resort, love affairs, government takeovers, an executive who traveled with his polo ponies (even to places that didn't have polo fields), assassinations, and luxury homes across the world, including a 5th Avenue penthouse that became the home of film director Woody Allen.

Shelp, who spoke about AIG and Greenberg's entwined histories at Emory University's Goizueta Business School earlier this year, had originally considered writing a fictional account of the company. But that was before Eliot Spitzer, then the attorney general of New York, placed AIG in his crosshairs and before the accounting scandal broke. Once Greenberg was forced to resign from AIG in 2005, Shelp decided to produce a nonfiction account of all that went on to lead Spitzer to target AIG and, specifically, Greenberg.

This in not a book about insurance, Shelp told his Goizueta audience. It's the story of dynamic, eccentric people from all different walks of life.

That story begins long before global expansion, when the then 27-year-old Cornelius Vander Neil Starr bet on China and launched American Asiatic Underwriters (AAU) in Shanghai in 1919. Acting as a subagent for American insurers, Starr expanded to other countries, hiring talented locals to head up AAU's offices. If they didn't know the insurance business, Starr taught them.

To help him set up shop in certain countries, Starr needed the influence of the American government. He befriended politicians and high-powered government officials. Though various wars, including the Second Sino-Japanese War and WWII, set Starr's companies back, he seized opportunities in their aftermath. When American commerce went overseas to assist in the reconstruction of Europe, Starr and his companies were there. By the end of the 1950s, the company, then dubbed American International Underwriters (AIU), operated in 75 countries.

A powerful contributor to AIG's success has been its uncommon ability to get what it wants from governments here and abroad, writes Shelp. The company routinely tries to persuade, cajole, or, if necessary, intimidate officials at all levels anywhere in the world. As Shelp puts it, protecting AIG's interests meant going way beyond the business realm and playing in the political arena.

Neil Starr routinely landed great deals for his company. (Because of agreements Starr made with leaders in Bermuda, there are currently more than 1600 insurers incorporated in the small subtropical country-about one for every 40 residents, notes Shelp. And finance, not tourism, is Bermuda's biggest industry.)

These types of relationships continued under the direction of Hank Greenberg, Starr's designated successor in 1968. A glance at AIG's board of directors during Greenberg's AIG days illustrates the company's ties to the political realm. Board members included U.N. Ambassador Richard C. Holbrooke and former U.S. Defense Secretary William S. Cohen. They gave the company prestige, opened doors, helped solve problems and never questioned Greenberg's authoritarian rule, at least until the serious troubles started, writes Shelp.

This pre-serious troubles culture persisted up and through the mid-2000s, even though the regulatory world of the new millennium was vastly different than the one Neil Starr and Greenberg traversed for much of AIG's existence. Although the regulatory climate had changed, it was business as usual at AIG. When called out by Spitzer, Greenberg bucked up. According to Shelp, Greenberg's personality didn't win him any favors. [His] temper and sharpness with everyone-subordinates, journalists, directors, government officials-is a legend, writes Shelp. Learning to survive at AIG meant learning to manage Hank Greenberg.

While Greenberg's expansion of AIG garnered the company a top ten spot on the list of Fortune 500 companies, it also attracted the attention of regulators. One of the heated criticisms people have made about AIG for many years, and especially since the company confronted its accounting crisis, is that it is too complicated, Shelp explains in Fallen Giant. By the time Greenberg resigned, there were hundreds of companies operating under the AIG umbrella, many of them located offshore.

As a former employee, Shelp clearly respects what Greenberg did to transform AIG from what was essentially an insurance backwater into an international financial powerhouse. As a writer, Shelp carries elements of that respect, as well as the caution of someone who operated under Greenberg's watchful eye for more than a decade.

Shelp does criticize certain moves made by Greenberg, including a series of deals in 2000 and 2001 that involved loans dressed up on the books as premium revenue, as Shelp puts it. But the author is never heavy-handed and almost always offers another, pro-Greenberg side of the story.

[Greenberg] kept ahead of economic changes, insurance needs in society, political change. But his mistake was in not grasping the fundamental change in regulation that had been brought about by Sarbanes Oxley. What had been acceptable a few years earlier was no longer acceptable, writes Shelp in the book's last chapter. The corporate culture Greenberg created clearly contributed to his downfall. Simply stated, it became essential to make your numbers.

Shelp describes Greenberg as resilient, but one has to wonder if an 84-year-old man who has lost the company he presided over for nearly four decades, much of his wealth, and perhaps even more of his reputation-and whose civil law suit still hangs in the balance-can bounce back.

Something [Greenberg] has said on a number of occasions suggests the outlook he brought to his work as he untiringly searched for opportunities for AIG, writes Shelp. That quote represents a philosophy that drives everyone who works with him: 'All I want in life is an unfair advantage.' These days, one could argue Greenberg is experiencing the other side of that axiom.

Greenberg has been forced to watch from the sidelines as the company whose name was almost inseparable from his own buckled in the wake of the subprime mortgage crisis. To keep it afloat, the U.S. government fronted AIG, the world's largest insurer, $182.5 billion. To raise capital and repay the government, AIG has been selling off assets-prime Tokyo real estate, the company's finance operations in Argentina, Thailand and Switzerland. The divesting continues.

In 1968, the year Greenberg took the reigns of the insurance company later known as AIG, its profits totaled $14 million, notes Shelp. When the company went public in 1969, its initial market cap was $915 million. At the time of Greenberg's ouster, AIG boasted a market cap of $165 billion and was a Fortune 10 company with sales of $113 billion and more than 115,000 employees operating in 130 countries. In May 2008, the stock traded for a respectable $50/share. For most of 2009, however, AIG stock hovered in the $1.50/share range. A 1-for-20 reverse stock split on July 1st of this year led to a further decline in the stock's value.

As a result of the company's downfall, Greenberg, the largest single shareholder in the company (prior to the U.S. government's bailout), lost an estimated 95 percent of his total assets, or about $3 billion. I can't believe I'm looking at the same company, Greenberg told The New Republic in February 2009. It's incredible. Everything I look at is bad.

In AIG's view, that includes Greenberg's alleged breach of trust when he orchestrated the sale of more than $4 billion worth of Starr's AIG stock after being forced out of AIG.

The stock itself has an interesting history. When Greenberg took the insurer public in 1969, hundreds of millions of shares of the new company were given to Starr International to defend against hostile takeovers. Eventually, a long-term compensation plan-funded by the AIG stock held in Starr's treasure trove-was created to reward high performing company executives.

Greenberg, who was and still is chairman and CEO of Starr International, asserts that the stock in question had all along been in a trust for charity and that there was no forever requirement that Starr's AIG shares be used to fund AIG's bonus program. Greenberg's team of lawyers submitted ample legal documentation of the charitable trust, while AIG lawyers failed to provide counter documentation to back their assertion that the trust was primarily designed to fund executive compensation plans.

But even AIG has changed its tune. Following the lambasting its executives received after handing out some $160 million in bonuses earlier this year, AIG has stated that any bounty awarded it as a result of this case will be used to pay back U.S. taxpayers.

The drama in Shelp's 2006 Fallen Giant comes to a close just as AIG files its complaint against Greenberg, but given Greenberg's recent trial, it's a timely book filled with background information essential for anyone interested in the events leading up to the lawsuit.

While Fallen Giant tells an engrossing story, slight changes in organization would have made it a smoother read. For example, the book includes a timeline and a list of important characters, but they're printed at the end of the book. The timeline is not referred to in the text, so readers may not discover it until after finishing the book. And given the number of companies and acronyms-AIU, AIUA, AIUO, ALICO, AIRCO, SICO, AIG and so on-the timeline comes in handy.

The original tome has a number of inconsistencies that make reading the book problematic. Among them Shelp tends to bounce back and forth between proper nouns, calling Greenberg Hank Greenberg sometimes and Maurice Greenberg on others. There are leaps in the otherwise chronological text that make following it difficult along with obvious editing issues that lead to the retelling of a story or the reintroduction of a character introduced previously (for instance, we're told about Neil Starr's underwriting of Madame Butterflymore than once and both times the story is told as if it were the first time).

AIG may be better known for what has happened to it over the course of the last year, and many may have forgotten why Spitzer went after AIG in the first place. But Fallen Giant isn't about a single event or, as Shelp reminds those he speaks to, an insurance company. It's a story, as he told the audience at Goizueta, of a unique corporate culture it took 80 years to develop. Unfortunately, the company's torrid downfall took significantly less time. To add insult to injury, this past month after several AIG employees were harassed in public, the company removed its logo from employee badges and corporate charge cards.

Shelp's visit to Goizueta was co-sponsored by Benn Konsynski, George S. Craft Professor of information systems and operation management at Goizueta, along with Vice Provost for International Affairs Holli A. Semetko of the Claus M. Halle Institute for Global Learning.