The United States government’s motion to dismiss a $25 billion lawsuit filed by Maurice “Hank” Greenberg, the former chief executive officer of American International Group Inc (NYSE:AIG) was rejected by a federal judge, according to report from Reuters.
Lawsuit deserves analysis
Judge Thomas Wheeler of the United States Court of Federal Claims rejected the motion to dismiss citing the reason that Greenberg’s lawsuit deserves analysis and testimony from qualified expert witness because it involves “complex financial and economic issues.”
“The complexity of the submissions and the factual disagreements strongly point to the need for a trial,” wrote Judge Wheeler in his ruling on Monday. The trial for the case is scheduled on September 29, and it is expected to last for six weeks.
Commenting on the decision of the court, David Boies, a lawyer representing Greenberg and Starr International said, “The decision speaks for itself.”
Greenberg’s allegation against US government to takeover AIG
In 2011, Greenberg and his firm, Starr International alleged that the decision of the United States government to takeover American International Group Inc (NYSE:AIG) during the 2008 financial crisis was unconstitutional, and violated the Fifth Amendment—improper use of private sector assets.
Starr International was the largest shareholder of American International Group Inc (NASDAQ:AIG) with 12% stake prior to the government bailout on September 16, 2008. At the time, AIG was suffering huge losses.
The U.S. government initially acquired 79.9% stake in the insurance giant after providing $182.3 billion bailout and conducted a reverse stock split, which diluted the stockholdings of existing shareholders.
Last year, Atty Boies explained that the primary intention of the government in taking over American International Group Inc (NYSE:AIG) was to protect the country’s economy, and rescue the financial system. However, Boies emphasized, “Although this might be a laudable goal, as a matter of basic law, could not and did not justify the unlawful means employed. The government is not empowered to trample shareholder and property rights in the midst of a financial emergency.”
In 2012, American International Group Inc (NYSE:AIG) completely repaid the bailout, which left taxpayers almost $23 billion profit.