Record losses in 2008 cast doubt about on whether AIG could compensate investors hurt in 2004, said Thomas A. Dubbs, senior partner for Labaton Sucharow LLP and lead counsel for the Ohio funds, which provide for the retirement of firefighters, police officers and teachers.  In 2010, as AIG returned to profit and struck a deal to regain independence, Benmoshe agreed to settle the case for $725 million, with an initial $175 million payment.

Raising the rest through the share offering was "a creative and outstanding result, given that in the fall of 2008, many people believed that AIG might not survive," said Dubbs.