Business, Economics and Jobs

AIG considers suing government after repaying bailout


A view of insurance company AIG in London, England, on Mar. 26, 2009.


Dan Kitwood

American International Group, whose government bailout funds totaled $182 billion, may win the "hypocrite of the day" award. 

AIG, which received one of the heftiest bailout packages during the financial crisis, may turn around and sue the Federal government for $25 billion.

The company's board will meet tomorrow to decide whether it will join a shareholder lawsuit alleging that the terms of the 2008 bailout were "unfair" and that the government's high interest rates "deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation,'" the New York Times reported

An AIG spokesman said the board "takes its fiduciary duties and business judgment responsibilities seriously," according to the Wall Street Journal

The White House had no comment on the potential lawsuit against them, which is spearheaded by Starr International Co., formerly a major AIG shareholder, according to the Journal. 

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News of the possible suit brought immediate backlash against the firm, as former New York Attorney General Eliot Spitzer said it was "insulting to the public," according to Reuters.

Spitzer headed an investigation into AIG while he was in office. 

Newly appointed Senator Elizabeth Warren also called the lawsuit rumors "outrageous," adding that AIG shouldn't "bite the hand that fed them for helping them out in a crisis, The Hill reported

"AIG's reckless bets nearly crashed our entire economy," said Warren, who holds a seat on the Senate Banking Committee. "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."

Ironically, AIG launched a new advertising campaign this month which thanks the government and American taxpayers for supporting them through the crisis, the Wall Street Journal reported. 

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