Reuters: Regulatory News: AIG may join bailout suit against U.S. gov't

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AIG may join bailout suit against U.S. gov't Jan 8th 2013, 13:12 Tue Jan 8, 2013 8:12am EST * Board to meet Wednesday to decide * NYTimes first reported plans to join suit * Ex-CEO Greenberg called Fed 'loan shark' Jan 8 (Reuters) - American International Group Inc, the insurer rescued by the U.S. government in 2008 with a bailout that ultimately totaled $182 billion, may join a lawsuit against the government alleging the terms of the deal were unfair. The company confirmed a New York Times report that said AIG's board would meet Wednesday to discuss joining a lawsuit filed against the government by the insurer's former chief executive, Hank Greenberg. The move would be something of a shock development given that AIG just launched a high-profile TV ad campaign called "Thank you America," in which it offers gratitude for the rescue, which was fully repaid with a profit last year. At the same time, Chief Executive Bob Benmosche has complained publicly that the company and its management have not gotten enough credit for avoiding a collapse, turning the business around and returning to profitability. Greenberg, whose Starr International owned 12 percent of AIG before its near-collapse, has accused the Federal Reserve Bank of New York of using the rescue to bail out Wall Street banks at the expense of shareholders, and of being a "loan shark" by charging exorbitant interest on the initial loan. A federal judge in Manhattan dismissed Greenberg's suit against the New York Fed in November; a separate suit under different legal theories in the U.S. Court of Federal Claims is still pending. An AIG spokesman declined to comment beyond confirming that the board would meet. Link this Share this Digg this Email Reprints

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