AIG will not sue U.S. over bailout terms
AIG announced yesterday it would not be joining the $25 billion suit brought by its former CEO Hank Greenbergs company Starr International Co. Inc. because, frankly, its just icky.
January 10, 2013 at 06:09 AM
6 minute read
The original version of this story was published on Law.com
Earlier this week, news broke that American International Group Inc. (AIG) was considering joining a lawsuit against the U.S. government over the terms of its multibillion-dollar bailout. Not surprisingly, the fact that AIG would even consider suing a government that forked over $182 billion in 2008 to rescue it from financial collapse was mind-boggling to many.
But everyone can breathe a sigh of relief. AIG announced yesterday it would not be joining the $25 billion suit brought by its former CEO Hank Greenberg's company Starr International Co. Inc. because, frankly, it's just icky.
“It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government,” AIG's current CEO Bob Benmosche told CNBC.
Starr filed the suit in November 2011 claiming the government was in violation of the Constitution when it didn't provide shareholders fair compensation by taking a nearly 80 percent stake in AIG as part of the bailout agreement. It filed the suit on behalf of AIG shareholders.
It seems unlikely AIG was ever seriously considering joining the suit. The insurer said, however, that by law, it was its fiduciary dutry to its shareholder to consider three options: 1) take over the suit and pursue claims on its own, 2) try to stop Starr from pursuing the claims, or 3) allow Starr to move forward with its suit on AIG's behalf.
Putting smiles on the faces of many of the suits critics, AIG is opting for Door No. 2 and will try to stop Starr from pursing the claims. Starr's lawyers, David Boies, said in a statement, however, that that would not be in AIG's shareholders' best interest.
“Whether or not the AIG Board will be successful in blocking Starr's efforts to recover damages for their shareholders will ultimately be decided the Court,” Boies said in his statement.
Read more InsideCounsel stories involving AIG and the financial crisis:
AIG considers joining suit against U.S. government over its bailout
BofA enters multibillion-dollar settlement with Fannie Mae
U.S. government files $1 billion suit against Bank of America
Barney Frank defends JPMorgan against government lawsuit
Homeowners accuse 12 banks of manipulating Libor
Bank of America pays $2.43 billion in shareholder suit settlement
Lehman Brothers to pay another $10.5 billion to creditors
Citigroup will pay $590 million in settlement related to financial crisis
Earlier this week, news broke that
But everyone can breathe a sigh of relief. AIG announced yesterday it would not be joining the $25 billion suit brought by its former CEO Hank Greenberg's company Starr International Co. Inc. because, frankly, it's just icky.
“It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government,” AIG's current CEO Bob Benmosche told CNBC.
Starr filed the suit in November 2011 claiming the government was in violation of the Constitution when it didn't provide shareholders fair compensation by taking a nearly 80 percent stake in AIG as part of the bailout agreement. It filed the suit on behalf of AIG shareholders.
It seems unlikely AIG was ever seriously considering joining the suit. The insurer said, however, that by law, it was its fiduciary dutry to its shareholder to consider three options: 1) take over the suit and pursue claims on its own, 2) try to stop Starr from pursuing the claims, or 3) allow Starr to move forward with its suit on AIG's behalf.
Putting smiles on the faces of many of the suits critics, AIG is opting for Door No. 2 and will try to stop Starr from pursing the claims. Starr's lawyers, David Boies, said in a statement, however, that that would not be in AIG's shareholders' best interest.
“Whether or not the AIG Board will be successful in blocking Starr's efforts to recover damages for their shareholders will ultimately be decided the Court,” Boies said in his statement.
Read more InsideCounsel stories involving AIG and the financial crisis:
AIG considers joining suit against U.S. government over its bailout
BofA enters multibillion-dollar settlement with
U.S. government files $1 billion suit against
Barney Frank defends JPMorgan against government lawsuit
Homeowners accuse 12 banks of manipulating Libor
Lehman Brothers to pay another $10.5 billion to creditors
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Trending Stories
- 1NY No-Fault Insurance Adopts Worker’s Compensation Fee Schedule
- 2With AI Expected to Be a Focus This Year, What Changes Can Midsize Firms Expect?
- 3Dissenter Blasts 4th Circuit Majority Decision Upholding Meta's Section 230 Defense
- 4NBA Players Association Finds Its New GC in Warriors Front Office
- 5DC Circuit Keeps Docs in Judge Newman's Misconduct Proceedings Sealed
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
