US government conducted ‘illegal taking’ through reverse stock split, shareholders argue
Two groups of AIG shareholders have won class-action status from a federal judge in a $25bn (£16.7bn) lawsuit by former AIG chief executive Maurice Greenberg over alleged losses caused by the US government’s bailout of the insurer.
Greenberg’s Starr International Co, once AIG’s largest shareholder with a 12% stake, sued the US in 2011 over what eventually became a $182.3bn bailout for the New York-based insurer.
By taking a 79.9% stake in AIG and then conducting a reverse stock split without letting existing shareholders vote, it is alleged that the government conducted an illegal taking that violated the constitution.
US Court of Federal Claims judge Thomas Wheeler appointed Greenberg’s lawyer David Boies, of Boies, Schiller & Flexner LLP, as lead counsel for the classes.
Citing Boies’ estimate that “tens of thousands” of shareholders might be affected, Wheeler said “class certification is by far the most efficient method of adjudicating these claims”.
On 9 January, AIG decided not to join Greenberg’s lawsuit, amid anger from congress and voters at the prospect that it might sue the same entity that rescued it from collapse.
Greenberg is separately appealing the 19 November 2012 dismissal of a related lawsuit in Manhattan federal court against the Federal Reserve Bank of New York.
On 1 March AIG bought back warrants from the treasury department, eliminating the government’s last financial interest in the insurer.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
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