NEW YORK, Jan 29 (Reuters) - A federal appeals court has upheld the dismissal of former American International Group Inc Chief Executive Maurice “Hank” Greenberg’s lawsuit accusing the Federal Reserve Bank of New York of unlawfully bailing out the insurer at the height of the 2008 financial crisis.
The 2nd U.S. Circuit Court of Appeals said “the uniquely federal interests at stake in stabilizing the national economy” justified the dismissal of claims under state fiduciary law by Starr International Co, Greenberg’s company.
The decision on Wednesday upheld a November 2012 ruling by U.S. District Judge Paul Engelmayer in Manhattan, which had been seen as an endorsement of broad central bank power to try to protect the global financial system from systemic threats.
Prior to being bailed out, AIG had been the world’s largest insurer by market value and Starr was its largest shareholder, with a 12 percent stake.