U.S. insurance giant American International Group, Inc. (AIG) said Wednesday that its board has decided not to participate in a US$25 billion suit against the U.S. government over the terms of its bailout at the height of the financial crisis.
AIG’s board was considering a demand served on it in relation to lawsuits filed by Starr International Company, Inc. against the government, which argues that the government took control of the company without providing just compensation when it was bailed out in late 2008. It called on AIG to either takeover the litigation, or to allow Starr to pursue the case on its behalf, as well as in its own interest.
The board announced that it has considered the issue, and has determined to refuse Starr’s demand in its entirety. It said that it will neither pursue these claims itself, nor permit Starr to pursue them in AIG’s name.
AIG expects to file a formal statement with the courts detailing the board’s decision, and the reasons underlying it, in the coming weeks.
“In considering and ultimately refusing the demand before us, the board of directors properly and fully executed our fiduciary and legal obligations to AIG and its shareholders,” said Robert ‘Steve’ Miller, chairman of the AIG board. “America invested in 62,000 AIG employees, and we kept our promise to rebuild this great company, repay every dollar America invested in us, and deliver a profit to those who put their trust in us. To date, AIG has returned $205 billion to America, including a profit of $22.7 billion. We continue to thank America for its support.”