Boston, MA 08/27/2014 (wallstreetpr) – According to reports, a federal judge has rejected a bid of US to dismiss the law-suit appeal worth of $25 billion that was filed by Maurice “Hank” Greenberg. He is the former Chief Executive Officer of American International Group Inc (NYSE:AIG).
What’s the matter:
According to the statement given by U.S. Court of Federal Claims Judge Thomas Wheeler, Starr International Co of Greenberg brought the case on behalf of Greenberg himself and many other shareholders of the company. The case involved various financial and economic issues which were very complex in nature and deserved significant amount of analysis from experts. Wheeler wrote in order, “The complexity of the factual disagreements and the submissions point out the need for a trial very strongly.” As per the information, this trial could last for six weeks. Reporters tried to get in touch with anyone from US department of justice, but they couldn’t do so. A spokeswoman of the department refused to comment on the issue.
Starr was the largest shareholder of American International Group Inc (NYSE:AIG) with a total stake of 12% before the government came forward to provide aid from skyrocketing losses to the insurer on Sept. 16, 2008. The government initially acquired 79.9% stake in American International Group Inc (NYSE:AIG) and executed reverse stock split and diluted existing shareholders. Starr sued the company three years back in 2011 saying that $182.3 billion bailout was illegal. According to him, the bailout violated his rights of due process under Fifth Amendment of the U.S. Constitution. Greenberg’s company also sued the Federal Reserve Bank of New York over its role in the entire process by stating that it tried to introduce a backdoor solution for bailout.
When the issue was put in front of 2nd U.S. Circuit Court of Appeals, it said that Federal Reserve Bank of New York had the complete authority to act in exigent and unusual circumstances. It included bank’s step to rescue American International Group Inc (NYSE:AIG) from bankruptcy.
