The board of AIG decided to not join a private shareholder lawsuit against the US government over the government’s $182 billion rescue of the insurer in 2008.
AIG said its board determined that a decision not to join the lawsuit led by former chief executive Maurice “Hank” Greenberg met its “fiduciary and legal obligations” to AIG and its shareholders.
The lawsuit filed by Starr International, which is controlled by Greenberg, argued that the massive bailout of AIG did not fairly compensate shareholders. Starr sued the government for $25 billion in November 2011.
The government took control of AIG in September 2008 to prevent its imminent collapse from sparking a snowball of gigantic failures throughout the global financial system, but it wiped out most of the value of AIG’s shares. Starr petitioned the board to join in or take the lead in the suit, but the board rejected the request.
“The AIG Board has determined to refuse Starr’s demand in its entirety, and will neither pursue these claims itself nor permit Starr to pursue them in AIG’s name,” the company said in a statement.
AIG said that in the coming weeks it would file with the courts a formal statement giving its “underlying” reasons for not joining the suit.
New York, Jan 9, 2013 (AFP)
