At the same time as AIG thanks America, quite literally, in new ads boasting about the company’s repayment of its $182 billion bailout by the taxpayers, its board is reportedly getting ready to decide whether or not to jump on a $25 billion lawsuit filed by AIG’s former CEO against the U.S. government.
The lawsuits, filed in 2011 by one-time AIG CEO Hank Greenberg’s Starr International company, claims that the feds violated the Fifth Amendment of AIG shareholders by taking their private property (i.e., their shares) for public use without providing just compensation.
The NY Times reports that the AIG board is scheduled to meet tomorrow to discuss the possibility of hopping on board this suit.
The board is required to consider this lawsuit on behalf of the company’s shareholders. If it does not, or if those shareholders believe it has not given full consideration to joining the suit, Greenberg — still a major shareholder in the company — could challenge the board’s actions (or lack thereof).
AIG’s possible involvement in the suit is not sitting well with many lawmakers, a number of whom see the company as a key figure in the recent financial crisis — one that would have gone down in flames forever without the government takeover.
“On the one hand, from a corporate governance perspective, it appears they’re being extra cautious and careful,” Frank Partnoy, a former banker who is now a professor of law and finance at the University of San Diego School of Law, tells the Times. “On the other hand, it’s a slap in the face to the taxpayer and the government.”
Meanwhile, Greenberg is set to release his new book The AIG Story, which according to excerpts published by Bloomberg News, claims the government almost ran the failing company into ground following the takeover.
“Contrary to proponents of anointing such professionals as ‘gatekeepers’ who police against corporate misconduct, the AIG story shows how such custodians run amok,” writes the 87-year-old, who after nearly 40 years with the company was forced out of his CEO seat at AIG in 2005 in the middle of a fraud investigation by the New York Attorney General’s Office.