Aug 26 A federal judge has rejected the United
States' bid to dismiss a more than $25 billion lawsuit filed by
Maurice "Hank" Greenberg, the former chief executive of American
International Group, over the insurer's government
bailout, clearing the way for a Sept. 29 trial.
Judge Thomas Wheeler of the U.S. Court of Federal Claims
said the case brought by Greenberg's Starr International Co on
behalf of itself and other AIG shareholders involves "complex
financial and economic issues" that deserve analysis and
testimony from qualified expert witnesses.
"The complexity of the submissions and the factual
disagreements strongly point to the need for a trial," Wheeler
wrote in an order dated Monday.
A trial is expected to last six weeks.
A U.S. Department of Justice spokeswoman did not immediately
respond to a request for comment. A spokeswoman for David Boies,
a lawyer for Starr and Greenberg, had no immediate comment.
Starr had been AIG's largest shareholder, with a 12 percent
stake, before the government rescued the New York-based insurer
on Sept. 16, 2008, from skyrocketing losses.
The government took an initial 79.9 percent stake in AIG and
conducted a reverse stock split, diluting existing shareholders.
Starr sued in 2011, contending that the $182.3 billion
bailout was an illegal taking that violated its due process
rights under the Fifth Amendment of the U.S. Constitution.
Starr had separately sued the Federal Reserve Bank of New
York over its role, accusing it of engineering a "backdoor"
bailout for Wall Street banks exposed to AIG.
But the 2nd U.S. Circuit Court of Appeals in January said
the New York Fed had authority to act in "unusual and exigent
circumstances," including "to rescue AIG from bankruptcy at the
height of the direst financial crisis in modern times."
AIG finished repaying the bailout in December 2012, leaving
taxpayers with a nearly $23 billion profit.
Greenberg, 89, led AIG for nearly four decades before his
The Court of Federal Claims sits in Washington, D.C., and
handles lawsuits seeking money from the government.
The case is Starr International Co v. U.S., U.S. Court of
Federal Claims, No. 11-00779.
(Reporting by Jonathan Stempel in New York; Additional
reporting by Aruna Viswanatha in Washington, D.C.; Editing by