Jury to hear claims in Starr-AIG battle--US Judge

By Grant McCool

NEW YORK, June 4 (Reuters) - A jury should hear the claims in litigation between Starr International Company Inc, controlled by former American International Group Inc (AIG.N) Chief Executive Maurice "Hank" Greenberg, against the troubled insurance giant, a U.S. judge ruled on Thursday.

U.S. District Court Judge Jed Rakoff said the trial would go ahead as scheduled on June 15 in Manhattan federal court after a disagreement between the parties over whether some claims should be heard by a jury or the judge alone.

"All of the claims will initially be tried to a jury, but the jury will effectively be rendering only and advisory verdict as to certain of the claims," Rakoff said in his written decision.

The court battle is one of numerous lawsuits outstanding between the company that was bailed out by the U.S. government in the financial crisis and Greenberg, or companies he controls.

A lawyer for Starr International could not immediately be reached for comment. A spokesman for AIG said the company was pleased with the decision.

"AIG looks forward to a full hearing of the evidence at the public trial," AIG spokesman Mark Herr said in an emailed statement.

Starr originally sued AIG in 2005 to reclaim items that remained behind when Greenberg left the company, such as a collection of valuable paintings, including one by Vincent Van Gogh.

AIG counter-sued, claiming the stock held by Starr was intended to fund deferred compensation for AIG employees.