AIG would have gone bankrupt if the U.S. hadn’t rescued it, leaving shareholders with nothing, Jack Gutt, a New York Fed spokesman, wrote in an e-mailed statement yesterday. “There is no merit to these allegations,” he said on the suit.
Three Choices
AIG said yesterday it had three paths to respond to the case, in which Starr makes some claims in the insurer’s name. AIG could take over the claims and litigate them itself, allow Greenberg to proceed on its behalf, or prevent him from prosecuting the claims.
The insurer, once the world’s largest, has sought to rebuild its reputation after repaying the bailout last year. AIG reached deals to sponsor U.S. and New Zealand rugby teams, redesigned its logo and restored its name to the property- casualty and life insurance operations. It began running television ads this year to thank taxpayers for their support and highlight that the U.S. made a profit on the rescue.
The case is Starr International Co. v. U.S., 1:11-cv-00779, U.S. Court of Federal Claims (Washington).