*** Caption: Maurice “Hank” Greenberg
AIG founder and former firm CEO Maurice “Hank” Greenberg sued the U.S. government and said it had no right in 2008 to bailout AIG. Though AIG’s board ousted Greenberg in 2005, he remained — along with his other company Starr Insurance Holdings — the firm’s largest stockholder.
In the original suit and in the 2015 court case, Greenberg claimed he and other stockholders had their stock value diminished and it cost them millions in losses. Greenberg and Starr won the case when a federal judge agreed the government overstepped its bounds. However, the judge refused to award them compensation saying it would bankrupt AIG.
Greenberg and Starr appealed the financial ruling.
The Federal Circuit Court of Appeals has now ruled and it tossed out the ruling that the government acted illegally and said Greenberg and Starr have no standing in any court challenge.
Only AIG can challenge and AIG decided not to sue.
In the ruling Chief Judge Sharon Prost wrote, “While punitive measures against a corporation may ultimately be borne by its shareholders, a finding that those measures targeted shareholders directly is a wholly different matter. The alleged injuries to Starr are merely incidental to injuries to AIG, and any remedy would go to AIG, not Starr.”
Starr and Greenberg attorney David Boies said, “we respectfully disagree.” He indicated that they will appeal to the U.S. Supreme Court.
Source link: Insurance Journal