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Former AIG CEO Sues Treasury, Fed for Takeover
New York Times
November 21, 2011
Maurice R. Greenberg, the former chief executive of the American International Group, sued the United States Treasury and the Federal Reserve Bank of New York on Monday, contending that their takeover of the insurer in the fall of 2008 was improper and that the Fed breached its duty to A.I.G. shareholders when it unwound the company’s disastrous bets on mortgage securities.
The two lawsuits were filed on behalf of Starr International, Mr. Greenberg’s company and a large A.I.G. shareholder. The suit against the Treasury was filed in the United States Court of Federal Claims in Washington, while the case against the New York Fed, a private corporation, was brought in Federal District Court for the Southern District of New York.
“What these lawsuits say is that in our country, not even the government, is above the law,” said David Boies, the lawyer at Boies, Schiller & Flexner, who represents Mr. Greenberg and Starr. “When the government takes action, although it has enormous power, there are legal limits to what they can do. One of those limits is that they cannot take private property even for a good purpose if they do it in violation of legal protection or don’t give just compensation.”
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