(FROM THE WALL STREET JOURNAL 6/26/15) 
   By Leslie Scism 

Maurice R. "Hank" Greenberg will allow that he is "pleased" with a court ruling earlier this month that the government violated the law in demanding a 79.9% equity stake in its 2008 rescue of American International Group Inc., the financial-services powerhouse he long ran.

But that is about as enthusiastic as the 90-year-old gets over a ruling that didn't award him and 275,000 other shareholders any of the $40 billion they were seeking.

"Obviously, we didn't bring the lawsuit to win half of a victory," he said Thursday in an interview in his office on New York's Park Avenue. Mr. Greenberg, who has been building another world-wide insurance conglomerate since leaving AIG in 2005, recently returned from a trip to Cuba, where he was assessing potential business opportunities.

While the June 15 ruling has been widely viewed as a big win for Mr. Greenberg in a case that many never expected to go to trial, he sees it as letting the government get away with unlawful action while the AIG retirees and employees who are part of the class-action case come away empty-handed.

Mr. Greenberg brought the suit in 2011 through Starr International Co., a company he heads and which was AIG's biggest shareholder at the time of the crisis. He said he was motivated partly by the letters and emails he said he received from AIG employees and retirees whose stakes in AIG were gutted by the free fall in the company's stock in 2008 and were diluted by the government's controlling stake as the company rebounded.

"So what obviously is disappointing [in the ruling] is that the government made $23 billion [in profit on the transaction], and they keep those funds," he said. "Many thousands of shareholders lost their life savings."

In the ruling, U.S. Court of Federal Claims Judge Thomas Wheeler said the lack of damages reflected that AIG's alternative to the government's harsh terms was bankruptcy, an outcome that likely would have left shareholders with nothing. AIG's initial $85 billion rescue package ultimately grew to nearly $185 billion and was fully repaid by the end of 2012, along with the roughly $23 billion profit.

Mr. Greenberg said he has "a lot of respect" for Judge Wheeler, but "I find it puzzling" that he concluded AIG's shareholders would have come out of bankruptcy with nothing. He believes the company could have worked through its liquidity problems outside bankruptcy or under court protection. The bailout came as AIG couldn't meet collateral calls tied to its sale of an unregulated type of mortgage-bond insurance to Wall Street firms and big banks.

Mr. Greenberg said he sees Judge Wheeler's ruling as important for future government dealings with private-sector companies in that it "certainly put into focus the limitations for what the executive branch can do without legislation by Congress."

But as for the Dodd-Frank Act passed in 2010 to help avert another financial-system meltdown, he said the law "has become so confusing, so complicated and so overregulating, it could have a negative effect on the economy." He recommends "a real, honest-to-goodness debate as to whether Dodd-Frank should be reviewed, simplified and redone in a more transparent way."

Starr's stake of more than 10% was worth about $20 billion at its peak and fell to about $500 million.

Mr. Greenberg declined to discuss his personal losses on AIG shares, saying, "I'm just one of 275,000." He said he wasn't upset when he was portrayed by critics as greedy in bringing the lawsuit, saying such criticism often stemmed from people's ignorance of the case. "They didn't do their homework," he said.

"It isn't about me personally here in this suit," he said. "What really was wrong here was very simple: The government via the [Federal Reserve] overstepped its authority."

Mr. Greenberg said he got word of the ruling when his assistant ran into his office after learning the news.

Mr. Greenberg's legal team already has filed its intent to appeal the portion of the ruling dealing with damages. Justice Department lawyers were continuing to review options, a spokeswoman said Thursday.

In filing its notice to appeal, Mr. Boies also told the court that Starr would seek to revive parts of the lawsuit that had been dismissed in a 2013 ruling. If successful, that move could expand by tens of billions of dollars the potential damages against the government.

From the 1960s through 2005, Mr. Greenberg built AIG into a globe-straddling financial-services behemoth. His leadership came to an end when then-New York Attorney General Eliot Spitzer accused Mr. Greenberg of accounting improprieties to portray an unduly rosy picture of AIG's results.

Mr. Greenberg, who denies wrongdoing, faces trial on two remaining civil-fraud charges from that matter in state court, possibly early next year.

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