Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!


More On

AIG will not sue U.S. over bailout terms

Insurer’s decision comes amid public and congressional outrage

Earlier this week, news broke that American International Group Inc. (AIG) was considering joining a lawsuit against the U.S. government over the terms of its multibillion-dollar bailout. Not surprisingly, the fact that AIG would even consider suing a government that forked over $182 billion in 2008 to rescue it from financial collapse was mind-boggling to many.

But everyone can breathe a sigh of relief. AIG announced yesterday it would not be joining the $25 billion suit brought by its former CEO Hank Greenberg’s company Starr International Co. Inc. because, frankly, it’s just icky.

"It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government," AIG’s current CEO Bob Benmosche told CNBC.

Starr filed the suit in November 2011 claiming the government was in violation of the Constitution when it didn’t provide shareholders fair compensation by taking a nearly 80 percent stake in AIG as part of the bailout agreement. It filed the suit on behalf of AIG shareholders.

It seems unlikely AIG was ever seriously considering joining the suit. The insurer said, however, that by law, it was its fiduciary dutry to its shareholder to consider three options: 1) take over the suit and pursue claims on its own, 2) try to stop Starr from pursuing the claims, or 3) allow Starr to move forward with its suit on AIG’s behalf.

Putting smiles on the faces of many of the suits critics, AIG is opting for Door No. 2 and will try to stop Starr from pursing the claims. Starr’s lawyers, David Boies, said in a statement, however, that that would not be in AIG’s shareholders’ best interest.

"Whether or not the AIG Board will be successful in blocking Starr's efforts to recover damages for their shareholders will ultimately be decided the Court," Boies said in his statement.

Read more InsideCounsel stories involving AIG and the financial crisis:

AIG considers joining suit against U.S. government over its bailout

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


Cathleen Flahardy

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.