Business

Greenberg Team to Grill Bernanke, Geithner on AIG Bailout

(David Shankbone/Flickr/CC license)
(David Shankbone/Flickr/CC license)

Andrew Zajac, Patrick G. Lee, and David Voreacos, BLOOMBERG

 

(Bloomberg Businessweek)—In Maurice “Hank” Greenberg’s telling, the $182 billion taxpayer bailout that saved American International Group Inc. (AIG:US) and perhaps all of Wall Street during the 2008 financial collapse was a government rip-off.

It trampled the rights of shareholders, denying them more favorable terms offered to banks and companies that foundered during the meltdown, according to Greenberg, who built AIG into the world’s biggest insurer before leaving in 2005.

Greenberg’s Starr International Co., AIG’s largest shareholder when the financial crisis struck, sued the government, calling its assumption of 80 percent of the insurer’s stock an unconstitutional “taking” of property that requires at least $25 billion in compensation.

A trial of his claims begins today in Washington, where David Boies, Greenberg’s famed litigator, will question the architects of the bailout, including Ben Bernanke, Henry Paulson and Timothy Geithner.

“I think they’re going to lose,” Marcel Kahan, a New York University law professor who specializes in corporate finance and governance, said of Greenberg and Boies. “I think they realize they’re going to lose. But you never know what’s going to happen.”

 

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