Judge to Hear Closing Arguments in Greenberg’s Case Against AIG Bailout

Closing arguments are scheduled for Wednesday in the U.S Court of Federal Claims in Washington, D.C. in a lawsuit challenging the 2008 government bailout of American International Group (AIG).

The suit was brought by Starr International Co. and its CEO Maurice Greenberg, who is a former CEO of AIG, and other AIG shareholders.

Last month David Boies, Starr’s attorney, argued that the terms of the government bailout and loan were unfair to AIG stockholders. The terms included an interest rate of 14 percent on the $85 billion loan and a demand for 80 percent of the stock. Boies said the government used the terms of the bailout to punish AIG.

In the defense of the bailout terms, Justice Department lawyers have told the court that AIG voluntarily accepted those terms at the time and that the Federal Reserve of New York acted within its authority when it imposed them.

Judge Thomas Wheeler will hear the closing arguments.

The case is Starr International v. U.S., 11-cv-00779, U.S. Court of Federal Claims (Washington).

Related:

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• Fed Counsel Grilled on AIG’s Bailout Terms vs. Banks’