SpiritOf1776_J4
06-15-2015, 11:29 AM
WASHINGTON — Maurice R. Greenberg, the former chief executive of the American International Group, prevailed in his lawsuit against the United States government on Monday, but a federal judge declined to award any damages. The lawsuit, brought by Mr. Greenberg on behalf of himself and other A.I.G. shareholders, contended that the Federal Reserve overstepped its bounds when it bailed out the giant insurer in 2008, taking 79.9 percent of the company’s equity in the process. They argued that the Fed did not have the legal right to take the equity and effectively become its majority owner as a condition for the bailout.
Judge Thomas C. Wheeler of the United States Court of Federal Claims sided with Mr. Greenberg, who is still a large A.I.G. shareholder through his company Starr International. But at the same time, the judge ruled that Mr. Greenberg could not show that the shareholders were damaged by the seizure of the equity and therefore awarded no monetary judgment. Mr. Greenberg had been seeking nearly $40 billion in compensation.
Judge Wheeler wrote that the Fed’s action “constituted an illegal exaction under the Fifth Amendment.”
Judge Thomas C. Wheeler of the United States Court of Federal Claims sided with Mr. Greenberg, who is still a large A.I.G. shareholder through his company Starr International. But at the same time, the judge ruled that Mr. Greenberg could not show that the shareholders were damaged by the seizure of the equity and therefore awarded no monetary judgment. Mr. Greenberg had been seeking nearly $40 billion in compensation.
Judge Wheeler wrote that the Fed’s action “constituted an illegal exaction under the Fifth Amendment.”