Ex-AIG CEO Sues US Over Bailout

They say takeover violated investors' fifth amendment rights

By Kevin Spak,  Newser Staff

Posted Nov 21, 2011 2:07 PM CST

(Newser) – Former AIG CEO Hank Greenberg is suing the US government for $25 million for having the effrontery to bail out the dying insurer. Greenberg was ousted in 2005 after allegedly cooking AIG’s books to inflate its value, but still had a keen interest in the company during the bailout, because his firm, Starr International Co., was its largest shareholder. Now Greenberg’s saying that the bailout of the firm violated shareholders’ constitutional rights, the Wall Street Journal reports.

The suit argues that by taking an 80% stake in the company, the government violated the Fifth Amendment protection against seizing private property for “public use, without just compensation.” It did that to prevent a financial industry collapse, the suit allows, but “although this might be a laudable goal, as a matter of basic law, the ends could not and did not justify the unlawful means."

Former American International Group (AIG) Inc. CEO Maurice R. "Hank" Greenberg exits Manhattan federal court, Monday, June 15, 2009, in New York.   (AP Photo/ Louis Lanzano)
In this April 2, 2009 file photo, former AIG Chairman Hank Greenberg smiles on Capitol Hill prior to testifying before the House Oversight Committee.   (AP Photo/Gerald Herbert, File)
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