AIG may join bailout suit against US government

AIG launched a high-profile TV ad campaign last year called "Thank you America," offering gratitude for the rescue, which was fully repaid with a profit.

American International Group, 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.

 

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