Biting the hand: AIG may join suit over gov’t bailout terms

Biting the hand: AIG may join suit over gov’t bailout terms

Saved from collapse by a massive bailout, the insurance company AIG is now considering joining a lawsuit against the government, which claims the terms were too harsh. The complaint says shareholders were cheated by the $182 million bailout, which included high interest rates and billions in payments to AIG’s Wall Street clients. The New York Times reports the lawsuit was filed in 2011 by 87-year-old former CEO Maurice Greenberg, a major investor who ran AIG for more than four decades.

The lawsuit claims the terms of rescue were too harsh, and that shareholders were deprived of tens of billions of dollars, which violated the Fifth Amendment prohibiting seizure of private property for “public use, without just compensation.” According to The Times, AIG board members will meet tomorrow in New York to hear a presentation about joining the shareholder suit.

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