Cross border insolvencies and financial restructurings are remarkably opaque considering we live in the Information Age. The mission of the Centre of Main Interest (the COMI) is to light some candles in the darkness and create a forum for further discussion. The Law Offices of Tally M. Wiener, Esq. are pleased to publish the COMI blog.
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Wednesday, March 13, 2013
Greenberg Forges Ahead With Lawsuit Over A.I.G. Bailout
The American International Group’s former chief executive is moving ahead with a lawsuit against the federal government over its $182 billion rescue of the insurer — even without the backing of the company itself.
A.I.G.’s former leader, Maurice R. Greenberg, filed an amended complaint against the government on Tuesday, largely restating his arguments that 2008 bailout of the insurer was unconstitutional and wrongly cheated shareholders out of billions of dollars.
His case received support on Monday, when the federal judge overseeing the case granted the lawsuit class-action status.
The insurer’s chief executive, Robert H. Benmosche, has long promoted the fact that his company paid back the government in full — and with an additional $22.7 billion profit. (Coincidentally, Mr. Greenberg contends that the profit rightfully belongs to shareholders at the time of the bailout.)
By forgoing the lawsuit, A.I.G. risks missing out on billions of dollars that Mr. Greenberg and his fellow plaintiffs would garner if they win. That might also invite a multitude of lawsuits against the insurer.
In the amended complaint, filed by Mr. Greenberg’s Starr International Company, lawyers for Mr. Greenberg argued that A.I.G. was under pressure from its onetime largest shareholder, the federal government, not to join the legal fight.
“The United States indicated it would wage a negative public relations campaign against A.I.G. and its directors, terminate any cooperative relationship with AIG, and heavily scrutinize A.I.G.’s S.E.C., tax, and other filings from the 2008 to 2010 period when defendant controlled A.I.G.,” lawyers for Mr. Greenberg wrote.
A.I.G. said in a statement that its board’s decision in January hasn’t changed.
“A.I.G. will neither pursue these claims itself nor permit Starr to pursue them in A.I.G.’s name,” the company said. “A.I.G. will move to dismiss the derivative claims asserted by Starr in A.I.G.’s name, consistent with the A.I.G. board of directors’ previous decision. ”
A spokeswoman for the Treasury Department said in a statement: “Two months ago, the A.I.G. board of directors carefully reviewed Starr’s allegations and decided that they were not worth pursuing. We continue to believe that the claims have no merit whatsoever, and we will continue to defend the case vigorously.”