| WASHINGTON, June 30
WASHINGTON, June 30 The U.S. Supreme Court on
Monday rejected an appeal by former American International Group
Inc Chief Executive Maurice "Hank" Greenberg, who accused
the Federal Reserve Bank of New York of unlawfully bailing out
the insurer at the height of the 2008 financial crisis.
The court left intact a 2nd U.S. Circuit Court of Appeals
decision from January that said the New York Fed's authority to
address major threats to the economy justified the dismissal of
Delaware breach of fiduciary duty claims by Greenberg's Starr
International Co, which once held a 12 percent AIG stake.
AIG is based in New York but incorporated in Delaware and
was once the world's largest insurer by market value.
Starr had accused the New York Fed of engineering a
"backdoor" bailout for Goldman Sachs Group Inc and other
Wall Street banks at the expense of AIG shareholders by forcing
the insurer to unwind bets on mortgage debt through hundreds of
billions of dollars of credit default swaps.
There is a related case pending before the U.S. Court of
Federal Claims in Washington, which handles lawsuits seeking
money from the government. There, Greenberg and Starr called the
AIG bailout an illegal "taking" that violated the Fifth
Amendment of the U.S. Constitution.
The case is Starr International Co v. Federal Reserve Bank
of New York, U.S. Supreme Court, No. 13-316.
(Reporting by Lawrence Hurley; additional reporting by Jonathan
Stempel; Editing by Will Dunham)