Legal Experts Had Expected The A.I.G. Case To Be A Long Shot

New York Times, Tuesday, June 16, 2015

DEALBOOK: Surprise Ruling Finds Bailout Shorted A.I.G.

by Andrew Ross Sorkin

A Decision That Could End All Rescues

“For year’s, critics of the bailout during the financial crisis argued that the rescue efforts weren’t harsh enough.  The chief executives of failing institutions should have lost their jobs.  Shareholders should have suffered more pain.  Taxpayers should have received substantial compensation for the risk they took.

All that did come to pass in one case: the bailout of the American International Group (A.I.G.), the large insurer and symbol of the crisis.  Yet on Monday, the judge in Washington decided that the government’s actions were too severe and the rescue illegal.

When the Federal Reserve propped up the A.I.G. in September 2008, unlike its approach with most of the big banks, it threw out the company’s chief executive and took control of 79.9 percent of the company, nearly wiping out many of its shareholders.  Taxpayers got all of their money back, and then come, receiving a profit of more than $20 billion.

But in a stunning ruling, Judge Thomas C. Wheeler of the United States Court of Federal Claims said on Monday that those terms were too “draconian.” In other words, he suggested taxpayers should have offered A.I.G. a more generous deal…

The judge largely sided with Mr. Greenberg, confounding many legal experts who considered the (his) case a long shot, or difficult to win.

According to the N.Y. Times article, A.I.G. Boss Wins Suit But Loses the War, of this  date 6/16/2015, the U.S. Government’s defense was a “slam dunk.”

 

 

 

 

 

 

 

 

 

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