Judge: No decision for months on Greenberg's AIG case

GMT 05:16 2014 Wednesday ,26 November

Arab Today, arab today Judge: No decision for months on Greenberg's AIG case

Washington - AFP

The judge deciding whether the US government illegally seized insurance giant AIG amid the 2008 financial crisis will not rule for several months, according to a document filed Tuesday.
Testimony in the $40 billion lawsuit brought by Hank Greenberg, the former chairman of American International Group, concluded Monday.
Closing arguments are expected be heard "in March or April 2015," said Judge Thomas Wheeler, who is hearing the case without a jury, in the federal claims court filing. He did not set a date for closing arguments.
Greenberg, suing via his Starr International Company, the largest single shareholder in AIG at the time, argues that the government illegally took a 79.9 percent shareholding in the company in exchange for an $85 billion injection of capital and tens of billions more in high-priced loans.
Greenberg said the company, the world's largest insurer, was simply in need of funding as the financial system was locking up in September 2008.
By taking over the company, the government wiped out much of the value of existing shareholders' equity.
But the government argues that in saving the company, at least shareholders salvaged some value.
The trial opened on September 29. Among those testifying over the past two months on behalf of the government was former Federal Reserve Chairman Ben Bernanke and two former Treasury secretaries, Timothy Geithner and Hank Paulson.
Paulson was Treasury secretary at the time of the takeover and Geithner was head of the New York branch of the Federal Reserve, which supervised the biggest banks and the financial system generally.
On the first day of the trial, Paulson admitted the government set more onerous conditions for supporting AIG than it had for other rescued companies, saying the insurer "was treated on harsher terms than the ones comparable, like Citibank."
But if AIG had failed, he said, "it would have taken down the financial system and hurt millions of Americans."
AIG, which has repaid the government bailout and resumed profitability, is not a party to the lawsuit.

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