The AIG logo on the side of its headquarters building in New York City.(Photo: Mark Lennihan, AP)
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 the
deal were unfair, the company told Reuters news service Tuesday.
reported that the Federal Reserve Bank of New York, a key player in
approving the bailout, that AIG could have chosen bankruptcy and
entirely wiped out shareholders.
If true, AIG's move comes at an
awkward moment because there is nationwide TV ad campaign from the
company, thanking Uncle Sam for its help during the bailout, according
Reuters reported that AIG confirmed its board is set
to discuss the suit Wednesday, which was first filed by company's former
CEO Maurice "Hank" Greenberg.
Greenberg's suit accuses the New
York Fed to save troubled Wall Street banks at the expense of
shareholders, who saw their shares plunge in value, and of charging
extremely high interest rates on AIG's rescue loan.
appealing the dismissal of the case by a federal judge in Manhattan in
November. A separate suit he filed is pending in the U.S. Court of
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.