It almost seems like a joke—the idea is so preposterous to some that it either incites rage or they laugh it off.
American International Group Inc. (AIG) said yesterday that it is considering joining a lawsuit against the federal government—the same government that spent $182 billion to bail the struggling company out of near financial ruin in 2008.
Former AIG CEO Maurice Greenberg’s investment firm Starr International Co. Inc. first brought the suit in November 2011 claiming the government didn’t provide shareholders fair compensation when it took a nearly 80 percent stake in AIG, as part of the bailout agreement. Starr, which says the government violated the Constitution, filed the suit on behalf of AIG shareholders and seeks $25 billion.
Although AIG said it is considering joining the suit, many experts believe it is unlikely the company will—in large part, due to the media and public backlash. Regardless, AIG said that by law, it must consider three options: take over the suit and pursue claims on its own, try to stop Starr from pursuing the claims, or allow Starr to move forward with its suit on AIG’s behalf.
The U.S. had previously requested the suit be thrown out, but the Court of Federal Claims denied that request. Regardless of AIG’s involvement, the suit will move forward.
Read more InsideCounsel stories involving the financial crisis:
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
