By Leslie Scism
A federal judge's ruling Monday that the government overstepped
its authority in demanding an equity stake in bailing out American
International Group Inc. scored a moral victory for the company's
former long-time chief executive, Maurice R. "Hank" Greenberg.
But the 90-year-old isn't celebrating. Mr. Greenberg said he
will appeal the decision not to award shareholders any of the $40
billion in damages they were seeking, according to a statement
issued Tuesday by the firm Mr. Greenberg now heads, Starr
International Co. Starr was AIG's largest shareholder in 2008.
"We respectfully disagree with the trial court's legal
conclusion that, under applicable appellate cases, there is no
remedy for the government's illegal conduct," the statement
said.
In the Monday ruling, Judge Thomas C. Wheeler of the U.S. Court
of Federal Claims concluded that federal law didn't permit the
government to take a 79.9% equity stake in exchange for providing
an $85 billion emergency loan to AIG in September 2008, during the
darkest days of the financial crisis. That was a central element of
Mr. Greenberg's lawsuit.
But Judge Wheeler said "zero damages" were being awarded because
he had to take into consideration that AIG's alternative to the
government's harsh deal terms was to file for bankruptcy, an
outcome that likely would have left shareholders with nothing.
Representatives of the Justice Department couldn't be
immediately reached for comment.
Write to Leslie Scism at leslie.scism@wsj.com
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