AIG might join shareholder suit against U.S. over its bailout
WASHINGTON — At the same time American International Group Inc. has been running high-profile ads thanking America for the bailout that saved the company, the insurance giant reportedly is considering joining a shareholder suit against the government for the rescue.
The AIG board will meet Wednesday and could decide to join a $25 billion suit led by former chief executive Maurice “Hank” Greenberg, the New York Times reported.
The suit by Greenberg's Starr International Co. alleges that the 2008 bailout of AIG by the Treasury Department and Federal Reserve Bank of New York in which the government received an 80 percent ownership stake in the company violated the rights of shareholders. The ownership stake later climbed to 92 percent.
The suit in the U.S. Court of Federal Claims in Washington alleges that the bailout cost shareholders billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for public use “without just compensation.”
A similar suit against the New York Fed was thrown out by a New York federal judge in November.
But Judge Thomas Wheeler of the Court of Federal Claims had ruled in September that Greenberg's case could go forward.
A court filing said the AIG board expected to make a decision by the end of January.
An AIG spokesman declined to comment Tuesday. A Treasury Department spokesman also would not comment.
But U.S. officials would not be pleased if AIG joined the suit.
The company received the single largest bailout of the financial crisis, leaving the government on the hook for more than $182 billion.
AIG ended up taking about $125 billion in the complex, multistep bailout. In the process, the company became the poster child for reckless risk-taking on Wall Street and the focal point for anger by the public and lawmakers over the unprecedented government intervention to save the financial system.
In December, the government sold the last of its stake in AIG. The bailout formally ended with the taxpayers earning a $22.7 billion profit, though critics noted there were additional, incalculable costs, such as a loss of public confidence in the financial system and a precedent for rescuing too-big-to-fail financial firms.
AIG has been touting the end of the bailout with print, TV and online ads titled “Thank You America.”
The ads, which have aired in recent weeks during college football bowl games and National Football League playoff games, note the company “repaid every dollar America lent us.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.