Hank Greenberg, former AIG CEO, is no slouch. He knows exactly what kind of leverage he has in his quest to get the insurance company to join his lawsuit against the U.S. government for saving it from bankruptcy.
Last night the NYT reported that AIG’s board would hear a presentation from Greenberg on Wednesday and decide whether or not to sue the government over the $182 billion 2008 bailout by the end of the month.
Of course, the company has caught flack for even considering the decision, but it’s important to point out that the board is also caught between a rock and a hard place. If they decide not to join the suit, and Greenberg wins, things could get ugly.
If the board does not give careful consideration to the case, Mr. Greenberg could challenge its decision to abstain.
Should Mr. Greenberg snare a major settlement without A.I.G., the company could face additional lawsuits from other shareholders…
And it’s not Greenberg’s case has been totally laughed out of Court. Yes, a Judge dismissed it in NYC, but a Washington D.C.is letting it be heard.
This isn’t the first time Greenberg’s been in a sticky legal situation with the government and A.I.G.
Greenberg, 83, relinquished his post as AIG’s chief executive in 2005 amid a probe by then-New York Attorney General Eliot Spitzer for accounting fraud. The following year, the SEC charged AIG with securities fraud and improper accounting. The company settled the charges by repaying $700 million plus a fine of $100 million.
Greenberg ultimately agreed to pay $15 million to settle charges.