American International Group, the insurer rescued by the U.S.government in 2008 with a bailout that ultimately totaled $182 billion,may now join a lawsuit against the government alleging the terms of thedeal were unfair, the company told Reuters news service Tuesday.
Reutersreported that the Federal Reserve Bank of New York, a key player inapproving the bailout, that AIG could have chosen bankruptcy andentirely wiped out shareholders.
If true, AIG's move comes at anawkward moment because there is nationwide TV ad campaign from thecompany, thanking Uncle Sam for its help during the bailout, accordingto Reuters.
Reuters reported that AIG confirmed its board is setto discuss the suit Wednesday, which was first filed by company's formerCEO Maurice "Hank" Greenberg.
Greenberg's suit accuses the NewYork Fed to save troubled Wall Street banks at the expense ofshareholders, who saw their shares plunge in value, and of chargingextremely high interest rates on AIG's rescue loan.
Greenberg isappealing the dismissal of the case by a federal judge in Manhattan inNovember. A separate suit he filed is pending in the U.S. Court ofFederal Claims.
Reuters reported that the New York Fed says there is no merit to the suit's allegations.
The Treasury sold its the last of the AIG shares it owned in December, earning a $22.7 billion profit.
AIG shares were 1.3% lower Tuesday. Last year, AIG shares rose 52%, three times the gain of S&P's insurance company index.