The U.S. set illegal terms in demanding American International Group Inc. stock for an $85 billion bailout during the financial crisis, but that doesn’t mean AIG investors deserve compensation, a court ruled.
What began as a long-shot lawsuit by Hank Greenberg’s Starr International Co. gained credibility over years of failed government attempts to dismiss it. During an eight-week trial, Starr’s lawyer David Boies grilled Ben Bernanke, Hank Paulson and Timothy Geithner, and U.S. Court of Claims Judge Thomas Wheeler repeatedly ruled in Greenberg’s favor.
But in the end, Greenberg -- who had sought at least $25 billion in damages for shareholders -- got nothing. Though the absence of an award may temper the judge’s dramatic rebuke of the government handling of the bailout, the ruling may still limit the Federal Reserve’s ability to deal with the next crisis.
The case is Starr International Co. v. U.S., 11-cv-779, U.S. Court of Federal Claims (Washington).