AIG mulls lawsuit against U.S. for unfair bailout terms
Insurance company got $182B in federal money during financial crisis
Insurance giant AIG is considering suing the government agencies that bailed it out during the financial crisis because it now says the repayment terms were unfair.
The New York Times reported Tuesday the firm, which received federal aid worth more than $182 billion US in the years following the financial crisis, is considering joining a lawsuit launched by shareholders who argue the terms of the bailout were too harsh and deprived them of tens of billions of dollars worth of subsequent stock gains.
The newspaper said that AIG's board will meet Wednesday to decide whether or not to join the $25 billion legal action.
Although AIG has since paid back all of the bailout funds it received, the company's critics note that the alternative to the bailout at the time would have been bankruptcy.
Newly elected Democratic Sen. Elizabeth Warren of Massachusetts, who based her election campaign around cracking down on Wall Street greed, reacted forcefully to the report Tuesday.
"AIG’s reckless bets nearly crashed our entire economy," she said in a statement. "Taxpayers across this country saved AIG from ruin, and it would be outrageous for this company to turn around and sue the federal government because they think the deal wasn’t generous enough."
"AIG should thank American taxpayers for their help, not bite the hand that fed them," Warren said.
The case is spearheaded by former AIG head Maurice "Hank" Greenberg, who remains a major shareholder in the firm.
As recently as New Year's Eve, AIG launched a television ad campaign entitled "Thank You America" in which the company thanks taxpayers for their support, and notes that the company has repaid its bailout funds in full, and added another $22.7 billion in profit to government coffers.