Less than two days after it began to draw the ire of, well, pretty much every American taxpayer, the board of AIG, the insurer bailed out by the federal government in 2008, met today and decided they wouldn't join a shareholder lawsuit against the U.S. government led by its former CEO, Hank Greenberg.
By doing so the board defuses an almost endless fit of backlash from Capitol Hill to Wall Street and back again. Prominent critics included Senator Elizabeth Warren (who warned AIG not to "bite the hand that fed them"), bailout inspector Neil Barofsky (who politely explained the silliness of the lawsuit: "The idea that AIG would have been better off by going bankrupt, for the shareholders is a very, very hard thing to sell, I think"), and liberal critics (headline from a rant by Rolling Stone's Matt Taibbi: "Hank Greenberg Should Be Shot into Space For Suing the Government over the AIG Bailout").
It's unclear whether AIG ever seriously considered suing the federal government: they've been running an ad campaign "thanking" America, and seem to have given their consideration only as a courtesy to the company's former CEO. But this week's sudden turnaround leaves the future of the insurer's recovery from the bailout up in the air — the Treasury is wiping its hands clean of the deal, after the U.S. government actually made $22 billion off the AIG bailout.
Greenberg's suit, according to Dealbook, will stagger on:
The board’s vote deals a blow to Mr. Greenberg’s case, which had already been dismissed in the New York court. That decision is under review by an appeals court, though the judge in the Washington court declined to dismiss the case.
This article is from the archive of our partner The Wire.
We want to hear what you think about this article. Submit a letter to the editor or write to email@example.com.