AIG won't join $25B lawsuit against U.S. government

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NEW YORK American International Group (AIG) won't be joining a $25 billion shareholder lawsuit against the U.S. government over the terms of its bailout at the height of the financial crisis.

• Bailed out AIG considers joining lawsuit against U.S.
  

The $182 billion bailout of the insurer by the Treasury Department was the largest of the 2008 financial crisis. Treasury, which last month sold all of its remaining shares of AIG, said it made $22.7 billion more than it funneled to the company.

• AIG expects losses of $1.3 billion
  
• Greenberg says U.S. owes him $25 billion
  
• Judge dismisses $25 billion suit over AIG rescue
  

The timing of the suit could hardly have been worse for AIG. The company is in the midst of a "Thank You America" ad campaign to show its gratitude for being rescued from the brink of collapse.

The prospect of the insurer joining the lawsuit had already triggered outrage. A congressman from Vermont issued a statement telling AIG: "Don't even think about it."

AIG, which was legally obligated to consider joining the lawsuit, demurred.

The suit alleges that the government took nearly all of the insurer's stock as part of its bailout without giving investors proper compensation.

"The Board of Directors properly and fully executed our fiduciary and legal obligations to AIG and its shareholders," Robert S. "Steve" Miller, chairman of AIG's board of directors said in a statement Wednesday. "We kept our promise to rebuild this great company, repay every dollar America invested in us, and deliver a profit to those who put their trust in us."

AIG nearly imploded after making huge bets on mortgage investments that later went wrong. Regulators were concerned that if it were allowed to fail it would send shock waves through the financial system, which was already reeling as Lehman Brothers collapsed.

Miller said in the statement that the insurer had returned $205 billion to the government.

Since the financial meltdown, AIG has undergone a restructuring that has cut its size nearly in half. Its aim is to focus the company on its core insurance operations.

In 2010, the company spun off Asian life insurer AIA Group in Hong Kong's biggest ever initial public offering to raise $20 billion, which was used to pay bailout debt.

In November, AIG reported a third-quarter profit of nearly $2 billion thanks to strength in its insurance operations and investment returns. In the same period a year earlier it lost $4 billion.

AIG's stock over the past 12 months is up more than 50 percent.

[legalbutunjust]

The true culprits were those employed at AIG's "Financial Products", of Wilton, CT. This division was the catalyst for AIG's tremendous blunders.

[jumkey]

They're suing the government for saving them

HAHAHAHAH...screw you America.

[TheDocD]

The former CEO and the one doing the suing needs to be brought into the CRIMINAL Justice System and put in PRISON after all of his money is CONFISCATED. HE CAUSED THIS MESS.

[WHAT-IS-HE-SMOKING]

Here's a novel concept, shareholders go after the board of AIG since they are the ones who agreed to the bailout and they can give you some of their Christmas bonuses.

[TheDocD]

Except the former CEO is the one that caused it and the one that is suing.... He should sue himself out of existence.

[hypnotoad72]

If the demand-side, swamped by shrinking wages and opportunities (jobs) were bailed out, the money would trickle up and the same companies would have been saved.

Wasn't Bush and co. aware of that possibility? (Perhaps they really weren't... some people can be so hyperfocused... even groups of people and what's going on can't necessarily be attributed to malice since there are other possibilities (reckless greed, looking good to shareholders, and/or other possibilities that I might not be seeing...))

[Mikexxxxxxx]

AND go after all the big-wigs at AIG, even if they have since bailed.

[speakthetrut]

The fact that AIG thought about suing the US government that bailed them out with $120 BILLION, is reason enough to never again bailout another BIG business. Let them go belly up, and let small, fresh businesses to sprout in it's place, just like what happens after forest fire.

[wesj153]

Dear share holders:Without the bail-out your stocks would be as valuable as a piece of a**-wiping paper.

[JerryNA100]

AIG lost $99Billion in 2008 due to horrible investing by creating credit default swaps. AIG was on the verge of closing. Complete failure. Total liquidation, not just restructuring. As Allan Roth stated, AIG was not a victim of the financial collapse, it was one of the causes. What would the shareholders gotten if the government had not bailed out AIG? A big fat zero. The stock would have been worth less than cheap wallpaper. The judge should take their lawsuit, rip it up, and fine the litigants as well as their lawyers for ingratitude and terminal stupidity.