There might not have been an undisputed winner after the U.S. Court of Federal Claims issued a mixed ruling in June in the audacious $40 billion shareholder lawsuit brought by Maurice “Hank” Greenberg against the federal government over its 2008 bailout of American International Group Inc. But one thing is certain. Emails from Davis Polk & Wardwell, which advised the U.S. Treasury and the Federal Reserve Bank of New York in the bailout, hurt the government’s case.
Judge Thomas Wheeler ruled that the bailout violated the Federal Reserve Act because the government didn’t have the authority to take control of AIG, and the terms it set for the bailout were too severe. But he declined to award damages, finding that the company would have been worse off without the bailout.
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