There are various words, many unprintable, that could be used to describe Hank Greenberg’s $25bn suit launched this week against the US government and the New York Federal Reserve over the rescue of American International Group in 2008. I’ll settle for ludicrous.
Mr Greenberg’s argument is that, as the largest shareholder in AIG through Starr International, the Panamanian-registered, Swiss-based investment vehicle he controls, he was unconstitutionally singled out to be stripped of 80 per cent of his equity in order to bail out a group of “foreign entities”. He would like his dollars back, right now.
The minor detail that he ignores is that if the New York Fed had stood aside in September 2008, AIG would have collapsed and its shareholders would have been left with nothing, rather than retaining 20 per cent of their equity. Instead, the Fed stepped in with a $85bn loan and went on, with Treasury support, to provide billions more in backing.