A federal judge denied the U.S. government the right to dismiss a lawsuit brought by former AIG head Maurice Greenberg. The suit is for $25 billion and is over the fact that when the government bailed out the New York-based insurance company to the tune of $182.3 billion, it also took the company’s shares, which is illegal, according to the Fifth Amendment. Critics of AIG argue that the recession was so dire that dramatic actions were necessary at that time. AIG has since paid off the entire amount given by the government and has given taxpayers a profit of $23 billion.
Greenberg, who is 89 years old, ran AIG for 40 years before retiring in 2005. There is a separate lawsuit against the Federal Reserve Bank of New York over the fact that it might have created a backdoor bailout of Wall Street banks which had dealings with AIG. The trial is scheduled for September 29th and is expected to go on for 6 weeks.
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