U.S. loses bid to dismiss ex-AIG CEO's $25 billion lawsuit over bailout

Tue Aug 26, 2014 6:28pm EDT
 
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By Jonathan Stempel

(Reuters) - A federal judge has rejected the United States' bid to dismiss a more than $25 billion lawsuit filed by Maurice "Hank" Greenberg, the former chief executive of American International Group Inc, over the insurer's government bailout, clearing the way for a Sept. 29 trial.

Judge Thomas Wheeler of the U.S. Court of Federal Claims said the case brought by Greenberg's Starr International Co on behalf of itself and other AIG shareholders involves "complex financial and economic issues" that deserve analysis and testimony from qualified expert witnesses.

"The complexity of the submissions and the factual disagreements strongly point to the need for a trial," Wheeler wrote in an order dated Monday.

A trial is expected to last six weeks.

A U.S. Department of Justice spokeswoman declined to comment.

"The decision speaks for itself," David Boies, a lawyer for Starr and Greenberg, said in a statement.

Starr had been AIG's largest shareholder, with a 12 percent stake, before the government rescued the New York-based insurer on Sept. 16, 2008, from skyrocketing losses.

The government took an initial 79.9 percent stake in AIG and conducted a reverse stock split, diluting existing shareholders.   Continued...

 
Former CEO of American International Group Inc, Maurice "Hank" Greenberg, checks his phone inside a car after leaving a building in downtown New York where he was deposed by the Attorney General's office March 10, 2010.  REUTERS/Jessica Rinaldi