AIG it will not join Greenberg lawsuit after all


Insurance giant AIG says it will not join a lawsuit that many would have considered bitng the hand that fed it. Image: Barrybar/Flickr/CC BY

Amid much criticism and speculation of a major public backlash, Insurance giant American International Group (AIG) has decided it will not be joining a lawsuit against the U.S. Government after all. The suit claimed that AIG’s shareholders were unfairly hurt by the terms of the federal bailout that saved it from bankruptcy.

Lawsuit says bailout cheats AIG shareholders

Maurice “Hank” Greenberg, one-time CEO of AIG and now CEO of Starr International, filed a lawsuit in 2011 that many are characterizing as the height of ingratitude. It claims that the federal government charged high interest rates and claimed 92 percent equity stake in AIG, thus cheating the company’s stock holders.

‘Too big to fail’

At time it was collapsing in 2008, AIG was considered by the federal government to be “too big to fail,” and that its fall would create a ripple effect throughout the entire financial system, which was already fragile from the collapse of Lehman Brothers.

In 2008, AIG took $182 in bailout money from the U.S. Government to keep it solvent during a structured bankruptcy. It was the largest such loan made by the federal government to bailout a financial institution.

‘Thank You America’

The call to join the suit came just as AIG was running its “Thank You America” PR ad campaign, trying to win back public approval by showing its gratitude for the bailout loan.

AIG says it had a fiduciary obligation to consider joining the suit. If Greenberg wins his suit, it could in turn be sued for not upholding its obligation to its stockholders.

Backlash immediate

But the news that the offer to join the suit was not immediately rejected did not set well with many.

The backlash began almost immediately in the wake of the Tuesday’s news that AIG was on the fence about joining the lawsuit. Vermont Representative Peter Welch (D) said, “Don’t even think about it.”

Whether because it is the right thing to do or because it fears criticism from the public and the federal government, AIG has decided to not join the suit.

“The Board of Directors properly and fully executed our fiduciary and legal obligations to AIG and its shareholders,” said AIG chairman Robert S. “Steve” Miller. “We kept our promise to rebuild this great company, repay every dollar America invested in us, and deliver a profit to those who put their trust in us.”

The Treasury Department announced in December that it has sold its final stake in AIG.


News Fix Now
Daily Finance

Match Financial specializes in obtaining fast approvals for installment and personal loans. From $100.00 to $30,000.00, all credit types welcome. For more information visit today.

Previous Article

« Welfare card withdrawals still occur at strip clubs, bars

EBT cards

Welfare, as it’s commonly called, is highly controversial, as many feel that people aren’t entitled to any money who are capable of working but refuse to do so. The cause of welfare advocates is not helped by sordid welfare card withdrawals, which are turning up at casinos, strip clubs and [...]

Next Article

Victims of identity theft have to wait for tax refunds »

identity theft

Victims of identity theft often go through hell trying to regain their financial identities. Adding to their misery, the IRS says that those victims may have to wait six months or longer before they can expect to receive their tax refunds. ‘Unacceptable wait’ for Identity theft victims According to the watchdog Taxpayer [...]