In 2008, the insurance giant was teetering on the verge of default until the federal government provided the firm with a bailout, helping stabilize AIG and several other Wall Street institutions. AIG received at total of $182 billion dollars from the federal government. The bailout was politically unpopular with Democrats and Republicans alike.
AIG has recently begun airing ads thanking the American people for the bailout which allowed the firm to survive the economic downturn and financial meltdown. The ads show AIG repaying the ad and working towards the future.
Maurice "Hank" Greenberg's Starr International owned 12 percent of the insurance giant when the bailout was announced and AIG accepted. Greenberg's lawsuit claims the terms of the bailout amount to loan sharking.
The New York Times reported Greenberg's on lawsuit Monday saying,
The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”
Greenberg is a former AIG chief executive and has urged AIG to join the lawsuit against the government. He left AIG in 2005 amidst civil charges.
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Update: AIG's board of directors voted Wednesday not to join the lawsuit with Greenberg. They will not be suing the federal government.