Starr International's bailout lawsuit against AIG, U.S. can proceed
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WASHINGTON—A federal judge has ruled that a $25 billion lawsuit filed by Starr International Co. Inc. against the U.S. government and American International Group Inc. can proceed.
U.S. Court of Federal Claims Judge Thomas Wheeler on Monday denied the government’s motion to dismiss the case, which centers on the government’s actions during the bailout of AIG in September 2008.
Starr, led by former AIG Chairman and CEO Maurice R. Greenberg, was the largest shareholder of AIG common stock at the time of the bailout, which saw the government assume a nearly 80% ownership stake in AIG.
According to Starr, the government took control of AIG at the height of the financial crisis in order to use the insurance company’s assets to provide a “backdoor bailout” to other troubled financial institutions. Starr alleges that the government took 562,868,096 shares of AIG common stock without due process or just compensation.
The government maintains that AIG voluntarily entered into the loan agreement and that Starr lacks standing to maintain its direct claim because the interests forming the basis of that claim belong to AIG, not Starr or any other shareholder.
“After considering the parties’ filings and oral presentations, the court grants in part and denies in part the government’s motion to dismiss,” the ruling states.
A spokesman for AIG said the company had no comment on the ruling.
A Starr International spokesman was unavailable for comment.
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