June 26, 2013 / 8:05 PM / 6 years ago

Greenberg may pursue narrowed lawsuit over AIG bailout

Former CEO of American International Group Inc., Maurice "Hank" Greenberg, (C) leaves a building in downtown New York after being deposed by the Attorney General's office March 10, 2010. REUTERS/Jessica Rinaldi

(Reuters) - A federal judge on Wednesday allowed former American International Group Inc (AIG.N) Chief Executive Maurice “Hank” Greenberg to continue his lawsuit against the United States over the insurer’s bailout, but took away some of his claims.

Greenberg’s Starr International Co may pursue claims over the government’s taking of a 79.9 percent stake in AIG in September 2008 and a separate 1-for-20 reverse stock split in June 2009, Judge Thomas Wheeler of the U.S. Court of Federal Claims said.

Wheeler nonetheless granted motions by the government and AIG to dismiss “derivative claims” that Starr had asserted on behalf of AIG shareholders, including over the insurer’s refusal to help him pursue the lawsuit.

Starr once held a 12 percent stake in AIG, making it the largest shareholder of what had been the world’s largest insurer by market value prior to the 2008 financial crisis. AIG eventually obtained a $182.3 billion federal bailout.

Reporting by Jonathan Stempel in New York; Editing by Gary Hill

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