|Source:||A.M. Best Company, Inc.|
Starr is led by AIG's former long-time chief executive
The suit, filed in the
Starr seeks damages of
In the chaos that resulted from the
Instead of providing AIG with the liquidity support offered to comparable firms, the government began several steps that eventually resulted in it taking control of AIG away from its shareholders and then taking a majority of AIG's shareholders' equity, "all without just compensation," the suit contends.
"The government loaned billions of dollars to numerous other financial institutions without taking any ownership in those institutions; when the government did take an equity interest, its interest was limited; it loaned billions of dollars to domestic and foreign institutions at interest rates that were a fraction of those charged to AIG; and it guaranteed hundreds of billions of dollars in loans to various institutions, including
"AIG and its common stock shareholders, by contrast, were singled out for differential — and far more punitive — treatment," the suit alleges.
Providing guarantees to back up AIG's obligations, as the government did with other comparable financial institutions, would have been more efficient and fair, the suit says.
"However, the unprecedented approach the government took with AIG enabled the government to use AIG as a vehicle to covertly funnel billions of dollars to other preferred financial institutions, including billions of dollars to foreign entities, in a now well-documented 'backdoor bailout' of these financial institutions," the suit contends. "In so doing, the government is not empowered to trample shareholder and property rights even in the midst of a financial emergency."
AIG declined to comment. Attempts to get comment from the
Starr is represented by the law firm of
A companion suit was filed in the
Earlier this year, C.V. Starr & Co. Inc. and
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