(Image source: Think Progress)

BY NICHOLE CARTMELL
ANCHOR NEVILLE MILLER


AIG just finished paying back the government for its $182 billion bailout. But now the company could be joining a $25 billion shareholder lawsuit against the government. Here’s Business News Network with the details.

“It's all a Fifth Amendment claim basically saying that the government kind of expropriated the rights of certain shareholders and used AIG to assist the rest of the financial system, other banks and insurers in the financial system...”

A.I.G.’s former chief executive Maurice Greenberg, filed the lawsuit in 2011 on behalf of fellow shareholders and has since encouraged AIG to join the case.  The New York Times reports the lawsuit argues

cheated the shareholders out of billions of dollars.

A writer for Slate explains the pros and cons of the lawsuit for AIG.

“The downside to suing is that the company will look venal and absurd in the eyes of everyone. On the other hand, if Greenberg wins and AIG doesn't sue, then AIG's management will be exposed to further litigation on the grounds that they're failed in their fiduciary duty to shareholders.”

The former U.S. Treasury department inspector general told Bloomberg he doesn’t think AIG will sign on to the lawsuit. He says one reason is...

“They are going through such lengths to rehabilitate the image of AIG... they're going to turn around and give the American taxpayer the equivalent of a giant middle finger of suing them for saving them.”

The New York Times reports the AIG board will meet on Wednesday to discuss the lawsuit. It is unclear whether the directors will join the case, but the board said in a court filing that it would probably decide by the end of January.

(SOC)

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AIG Could Sue the U.S. Government After Bailout

by Nichole Cartmell
0
Transcript
Jan 8, 2013

AIG Could Sue the U.S. Government After Bailout

 

(Image source: Think Progress)

BY NICHOLE CARTMELL
ANCHOR NEVILLE MILLER


AIG just finished paying back the government for its $182 billion bailout. But now the company could be joining a $25 billion shareholder lawsuit against the government. Here’s Business News Network with the details.

“It's all a Fifth Amendment claim basically saying that the government kind of expropriated the rights of certain shareholders and used AIG to assist the rest of the financial system, other banks and insurers in the financial system...”

A.I.G.’s former chief executive Maurice Greenberg, filed the lawsuit in 2011 on behalf of fellow shareholders and has since encouraged AIG to join the case.  The New York Times reports the lawsuit argues

  • the government’s 92 percent stake in company,
  • the bailout deals high interest rates and
  • the funneling of billions to insurer’s Wall Street clients

cheated the shareholders out of billions of dollars.

A writer for Slate explains the pros and cons of the lawsuit for AIG.

“The downside to suing is that the company will look venal and absurd in the eyes of everyone. On the other hand, if Greenberg wins and AIG doesn't sue, then AIG's management will be exposed to further litigation on the grounds that they're failed in their fiduciary duty to shareholders.”

The former U.S. Treasury department inspector general told Bloomberg he doesn’t think AIG will sign on to the lawsuit. He says one reason is...

“They are going through such lengths to rehabilitate the image of AIG... they're going to turn around and give the American taxpayer the equivalent of a giant middle finger of suing them for saving them.”

The New York Times reports the AIG board will meet on Wednesday to discuss the lawsuit. It is unclear whether the directors will join the case, but the board said in a court filing that it would probably decide by the end of January.

(SOC)

###

 

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