ONCE the world’s largest insurance company, AIG was unable to meet its commitments during the financial crisis. The government nationalised the firm to keep it from imploding. Hank Greenberg, AIG’s former chief executive, has long alleged that this bail-out, and its onerous terms, was illegal. He sued the government in 2011, launching an endless and costly case that has always carried a whiff of Charles Dickens, with no fewer than 1,600 exhibits, 8,812 transcript pages and 442 docket entries.
Finally, on June 15th, some progress was made. A federal court ruled that Mr Greenberg was, in his core claim, correct: “the government’s justification was entirely misplaced”. But the plaintiff’s celebrations would have to end there. As Judge Thomas Wheeler of the Court of Federal Claims explains in a 75-page opinion, the “Achilles’ heel” of Mr Greenberg’s case is that “if the government had done nothing, [AIG’s] shareholders would have been left with 100 per cent of nothing.”
Mr Greenberg sought damages in “excess of $40 billion” on behalf of Starr International, AIG’s largest shareholder, which he controlled....Continue reading
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