AIG, the insurer rescued by the US government in 2008 with a bailout that ultimately totaled $182bn (£113.3bn), may now join a lawsuit against the government alleging the terms of the deal were unfair, the company said yesterday.
AIG said its board would meet today to discuss joining a lawsuit filed against the government by the insurer’s former chief executive, Hank Greenberg.
The White House declined to comment, but one Democratic congressman called the criticism “utterly ridiculous”.
The news prompted a swift reaction from one of AIG’s saviours, with the Federal Reserve Bank of New York saying the insurer could have just as well chosen bankruptcy four years ago and wiped shareholders out entirely.
The move would be something of a shock, given that AIG just launched a high-profile television ad campaign called “Thank you, America,” in which it offers the public its gratitude for the bailout.
“If AIG enters this suit it would be the equivalent of a patient suing their doctor for saving their life,” said Mark Williams, a former Federal Reserve bank examiner who teaches in the finance department at Boston University.
“AIG needs to look at only itself as a company that recklessly engaged in excessive risk taking,” Williams added.
City A.M. Reporter