“Thank you” really doesn’t mean what it used to. After paying back $182 billion in bailout money -- and running an ad campaign (See Youtube video above) saying “Thank you America” -- insurance company American International Group is considering whether it should sue the government. A.I.G. is mulling the idea of joining a $25 billion shareholder lawsuit. The suit states that the government cheated shareholders of billions of dollars and disregarded the rule that you shouldn’t take private property for “public use, without just compensation” (the Fifth Amendment). How did the government do that? By taking a 92 percent stake in the company and, you know, saving it.
NYT:
The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”
Maurice R. Greenberg, A.I.G.’s former chief executive, who remains a major investor in the company, filed the lawsuit in 2011 on behalf of fellow shareholders. He has since urged A.I.G. to join the case, a move that could nudge the government into settlement talks.
...Some government officials are already upset with the company for even seriously entertaining the lawsuit, people briefed on the matter said. The people, who spoke on the condition of anonymity, noted that without the bailout, A.I.G. shareholders would have fared far worse in bankruptcy.
“On the one hand, from a corporate governance perspective, it appears they’re being extra cautious and careful,” said Frank Partnoy, a former banker who is now a professor of law and finance at the University of San Diego School of Law. “On the other hand, it’s a slap in the face to the taxpayer and the government.”
This should be a lesson that is never forgotten. If there's ever a "next time," bailout the taxpayers so that they can all keep their homes.
