Chutzpah, indeed. The lawsuit, which seeks more than $40 billion from the government, does not dispute that A.I.G. needed a $182 billion lifeline to survive the financial crisis. It instead challenges the onerous nature of the rescue. The government took what became a 92 percent stake in the company — a step it did not pursue with other bailed-out Wall Street giants — imposed a steep interest rate and steered billions of dollars to the insurer’s trading partners. Those decisions, the suit says, cheated A.I.G. shareholders and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.” Mr. Greenberg also contends that the Fed lacked the legal authority to demand a stake in A.I.G. That argument stems partly from past rulings, including a Supreme Court case that challenged President Truman’s takeover of the steel industry during the Korean War.
Posted on: Sat, 27 Sep 2014 04:31:03 +0000
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