Federal judge rejects U.S. bid to dismiss AIG lawsuit

Federal judge Thomas Wheeler has turned down a U.S. bid to dismiss a more than $25B lawsuit filed by former CEO of AIG (NYSE:AIG) Maurice "Hank" Greenberg.

The government's bailout in 2008 took an initial 79.9% stake in AIG and conducted a reverse stock split, diluting existing shareholders. Starr had been AIG's largest shareholder with a 12% stake.

Greenberg's Starr International sued in 2011, stating that the $182.3B bailout of AIG was an illegal taking and violated its due process rights.

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Comments (11)
  • kleemc
    , contributor
    Comments (112) | Send Message
    Absolutely ridiculous lawsuit. Greenberg is a sore loser.
    27 Aug 2014, 03:14 AM Reply Like
  • Danese
    , contributor
    Comments (86) | Send Message
    I recommend that you read his book, AIG. Needless to say, its seen through his eyes building this huge company, and main point: being ousted 2 years before the crisis by government chicane, the time when AIG grew its CDS to a mountain, so only to some degree responsible for this, as it turned out to be, gross failure. I had your eyes in the beginning, but I was changing my mind for every line mr Greenberg wrote, well documented and quite factual. I take the judge has stamina to go against public outrage, simply because also he realizes the facts are stunning. From a psychological point of view, I admirer the fighting spirit, quite remarkable for a man of his age. Apart from the suit he is busy building another impressive insurance company in the far east, I look forward to a career like this when I am in my late 80´s:)Greetings from Copenhagen, and by the way long AIG of today, which of course has almost nothing to do with the old company, as the most valuable old assets were stripped to pay back US-taxpayers with stellar profits of aprox 20 billion dollar...
    27 Aug 2014, 03:40 AM Reply Like
  • june1234
    , contributor
    Comments (4474) | Send Message
    Greenberg was ousted for good reason. His company and worthless swaps they sold were at the heart of 08 Nothings really changed from then really in fact they're bigger today than ever . Reason the ever growing global unregulated, underfunded now $800T CDS market is so large is courtesy of the huge bonuses brokers are still today compensated to promote them and there's still no money to pay any claims anymore then there was in 08, smoke and mirrors
    27 Aug 2014, 08:19 AM Reply Like
  • bdarken
    , contributor
    Comments (650) | Send Message
    It would be fun to see Greenberg win---and certainly "the game" of the trial
    will be an interesting one, but regardless of outcome, it's the taxpayers who foot the bill.
    27 Aug 2014, 07:43 AM Reply Like
  • philipmax
    , contributor
    Comments (428) | Send Message
    Great for Hanc Greenberg!
    Great for justice!
    Great implication for Fannie Mae shareholders vis-a-vis Treasury action!
    All in all, a good day for America
    27 Aug 2014, 08:59 AM Reply Like
  • Nami Hendel
    , contributor
    Comment (1) | Send Message
    I was in that reverse split...... I have read his book. I could not agree with you more. I'm excited by this. That guy needs "his" justice....
    27 Aug 2014, 09:31 AM Reply Like
  • curbyourrisque
    , contributor
    Comments (32) | Send Message
    They never should have bailed out AIG to begin with. Based on the merit of the case Greenberg should win. It would force the US Government to admit to a lot of things they won't want to admit too. FOR THAT ALONE, I am rooting for Greenberg.
    27 Aug 2014, 09:31 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1914) | Send Message
    Would Greenberg have preferred that they let AIG fail and his entire stake become worthless overnight?
    27 Aug 2014, 10:14 AM Reply Like
  • hksche2000
    , contributor
    Comments (1576) | Send Message
    HG has been a high roller and reckless actor/gambler until he lost his shirt when his luck ran out during the financial crisis. If we, the American tax payers, hadn't been coerced to bail AIG out to the tune of (at least) $160B, an unconscionable amount and larger than the annual GDP of many countries, there would be no AIG! How much longer can US tax payers be asked to pay for criminals who should be in jail, not in the courts.
    27 Aug 2014, 09:35 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11322) | Send Message
    You forgot about the part where U.S. taxpayers were paid back in full and the U.S. didn't have to deal with the effects of a collapse of a giant insurer.
    28 Aug 2014, 05:46 AM Reply Like
  • Danese
    , contributor
    Comments (86) | Send Message
    not only were taxpayers payed in full, but with a humongous profit of 20 billion dollar - so thanks to the stripped shareholders of AIG! That profit should be enough to pay for a fair trail. That AIG was able, at distressed prices in the first years after the financial crisis to pay back in full tells that the assets of the company was stellar (look at AIA, doing fantastic)- and rest of assets very good indeed, AIG is marching again. My conclusion is AIG was probably solvent also in 08, if they had refused to pay at once in full the CDS (to Goldman etc. - Hank Paulson saved his old boddied), that later turned out was to a high degree based on bad loans. To some extent AIG and HG are not the initiators, but the victims, of the financial crisis. Respect for for judge who had to go against so much prejudice and superficial assumptions.
    4 Sep 2014, 04:49 AM Reply Like
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