ONTD Political

AIG may join bailout lawsuit against U.S. government

12:02 pm - 01/08/2013

American International Group Inc, the insurer rescued by the U.S. government in 2008 with a bailout that ultimately totaled $182 billion, may now join a lawsuit against the government alleging the terms of the deal were unfair, the company said on Tuesday.

The news prompted a swift reaction from one of AIG's saviors, with the Federal Reserve Bank of New York saying the insurer could have just as well chosen bankruptcy four years ago and wiped shareholders out entirely.

The move would be something of a shock, given that AIG just launched a high-profile television ad campaign called "Thank you, America," in which it offers the public its gratitude for the bailout.

"If AIG enters this suit it would be the equivalent of a patient suing their doctor for saving their life," said Mark Williams, a former Federal Reserve bank examiner who teaches in the finance department at Boston University.

"AIG needs to look at only itself as a company that recklessly engaged in excessive risk taking. Government action gave AIG a second life," Williams said.

AIG confirmed on Tuesday that its board would meet Wednesday to discuss joining a lawsuit filed against the government by the insurer's former chief executive, Maurice "Hank" Greenberg.

Greenberg, whose Starr International owned 12 percent of AIG before its near-collapse, has accused the New York Fed 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 in November; it is being appealed. A separate suit under different legal theories is still pending in the U.S. Court of Federal Claims.

In his ruling, dated November 19, Judge Paul Engelmayer said AIG had notified the court it would hold a board meeting January 9 to discussing joining one of the suits, with a decision expected by the end of the month.

An AIG spokesman declined to comment beyond confirming that the board would meet as planned. The deliberations were first reported by the New York Times.

The New York Fed said Tuesday there was no merit to any allegations that the bank harmed AIG.

"AIG's board of directors had an alternative choice to borrowing from the Federal Reserve and that choice was bankruptcy. Bankruptcy would have left all AIG shareholders with worthless stock," a representative of the bank said Tuesday.

The U.S. Treasury declined to comment. It completed its final sale of AIG stock in mid-December, concluding the bailout with what Treasury called a positive return of $22.7 billion.

AIG shares fell 1.6 percent to $35.35 in morning trade. After losing half its value in 2011, the stock rose more than 52 percent in 2012, tripling the gains of the broader S&P insurance index.

(Reporting By Ben Berkowitz and Jonathan Spicer in New York; Editing by Nick Zieminski)

rainbow_fish 8th-Jan-2013 07:19 pm (UTC)
halfshellvenus 8th-Jan-2013 07:26 pm (UTC)
God, what a fabulous Gif!
angelofdeath275 9th-Jan-2013 03:14 am (UTC)
I really needed this gif today.
85redberries 9th-Jan-2013 06:15 am (UTC)
jeunelis 8th-Jan-2013 07:22 pm (UTC)
How about you go fuck yourselves AIG.
halfshellvenus 8th-Jan-2013 07:25 pm (UTC)
"If AIG enters this suit it would be the equivalent of a patient suing their doctor for saving their life"

Exactly. Don't like it? Well then, give the money back and fail all over again.

F***ing ingrates. :(

agentsculder 8th-Jan-2013 10:33 pm (UTC)
To be fair, they did give the money back, plus interest. But I understand what you mean. The largess of the US government is the only reason why the company still exists!
cpsings4him 8th-Jan-2013 07:26 pm (UTC)
mutive 8th-Jan-2013 07:29 pm (UTC)
Yeah, this bothers the hell out of me.

Tough luck that they "didn't need to be bailed out". They only didn't because all the people they owed insurance money to were bailed out, so didn't collect.

Same thing for Goldman Sachs and a lot of the others. Hey, the financial system didn't collapse, so...you did okay.

I am still furious at the government for *not* taking far stronger measures to prevent this in the future. Yes, I know that both parties are in the financial sector's pocket. But I still would *love* to see at least one of them take this on and be like, "You don't donate any money to my next campaign? I don't give a @#$@."
maynardsong 8th-Jan-2013 07:31 pm (UTC)
Talk about biting the hand that feeds. But it's welfare queens and folks on food stamps that abuse the government, of course. /bitter
tamingheadfauna 9th-Jan-2013 03:53 am (UTC)
^ This
uluviel 8th-Jan-2013 07:56 pm (UTC)
This makes me furious and I'm not even American, I can't imagine the rage I would feel if it was my tax dollars that had bailed out these assholes.
dafairyness 8th-Jan-2013 08:36 pm (UTC)
Image and video hosting by TinyPic
oceandezignz 9th-Jan-2013 12:37 am (UTC)
OT: EEEEEEE BIANCA! I love her and I hate her at the same time (When she was Anna in Fated I wanted to throw her off a BRIDGE)
carmy_w 8th-Jan-2013 08:50 pm (UTC)
1. No good deed goes unpunished.

satellite__eyes 8th-Jan-2013 09:46 pm (UTC)
Showing exactly why I will NEVER consider corporations "people". FUCK THE FUCK OFF WITH THIS SHIT.
molkat 8th-Jan-2013 09:53 pm (UTC)
Well this inspired me to rewatch "Too Big to Fail"
louisiane_fille 8th-Jan-2013 09:55 pm (UTC)
Ungrateful bastards. They're probably pissed that they couldn't use the bailout money to pay ridiculous bonuses or some such bullshit.
skellington1 8th-Jan-2013 10:40 pm (UTC)
Oh for fuck's sake.
crossfire 8th-Jan-2013 11:34 pm (UTC)
aviv_b 8th-Jan-2013 11:35 pm (UTC)
The federal government is a 'loan shark.' Really? You could have refused the deal and then gone out of business. Frankly, it wouldn't have bothered me a bit.

But since corporations are people, I think its appropriate to call you a bunch of steak eating, Cadillac driving, home theater watching welfare queens.
oceandezignz 9th-Jan-2013 12:48 am (UTC)
Corporations are people right? Well. Lets just introduce a law were stupid people get slapped hard when called out on it.

Watch them back the fuck up from that bullshit notion.
deathbytamarind 9th-Jan-2013 12:50 am (UTC)
AIG is a bunch of assholes anyway. I used to work for them and they're shady from top to bottom.
encircleme 9th-Jan-2013 05:32 am (UTC)
I used to live next to a major shareholder of AIG, good people on the surface, hellish once you started revealing the lower layers.
blackjedii 9th-Jan-2013 12:50 am (UTC)
This is of course a little while AFTER they've run lots of pro-AIG ads talking about how awesome the company is and how they have ~fulfilled their promise~ to the American people so we should totally invest in them again.

tl;dr next time just sink ya bastards
lurkch 9th-Jan-2013 03:39 am (UTC)
This news reported on BNN was explained as a large shareholder is forcing the company to look at joining the lawsuit but that they are unlikely to actually do it. Just thought I'd throw that out there as I didn't see that point clearly made in the above article.
dinkydo 10th-Jan-2013 01:27 am (UTC)
That's exactly what happened. AIG itself was never going to sue, it is their ex-chairman's lawsuit against the govt and he's a litigious asshole and wanting AIG to join to bolster his claim.
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