Wall St. Bankrolls Ex-Executive as He Sues Over A.I.G. Bailout
Maurice R. Greenberg, the former chief of A.I.G., has now raised several million dollars from three Wall Street investors to help cover the cost of the case.
One might call it “chutzpah,” as several irate lawmakers did, or “rubbing salt in the wounds” of the American taxpayer. But to a few Wall Street financiers, a lawsuit that accuses the government of short changing the American International Group in its 2008 bailout is something else: a promising investment in a cause they support.
Maurice R. Greenberg, 89, the former A.I.G. chief executive who still holds a large stake in the insurance company, filed the lawsuit on behalf of fellow shareholders. He has now raised several million dollars from three Wall Street companions to help cover the cost of the case.
Six years after the government saved Wall Street from the brink of collapse, the lawsuit is coming to trial, reopening one of the ugliest chapters in modern financial history.
With the legal bills mounting in the three-year case, Mr. Greenberg sought support from a certain breed of investor — those who have misgivings about the government.
The investments from Mr. Greenberg’s friends — their decisions and the details of their arrangement have not been previously reported — have breathed new life into a case that the government thought would never reach trial.
The case thrusts A.I.G. into a fight that the company itself does not support. For the insurer, which has since repaid the bailout and regained its footing, Mr. Greenberg’s case is a reminder of a time when it was synonymous with the excessive risk-taking that nearly imploded the economy.
In the A.I.G. case, Mr. Greenberg is sparing no expense. His legal team, which has taken over nearly an entire floor of a downtown Washington hotel near the courthouse, also includes the Wall Street law firm Skadden, Arps, Slate, Meagher & Flom.
“Neither the Constitution nor the Federal Reserve Act required American taxpayers to rescue A.I.G. and cushion the fall of its shareholders, much less to do so on terms even more favorable to Starr,” the government said in court papers.
Source: NYT- Wall St. Bankrolls Ex-Executive as He Sues Over A.I.G. Bailout
