As usual with something like this so much has been reported yet so little work has actually been done on it… So the general thesis out there is:

  • Greenberg is suing the US for its onerous bailout terms.
  • He is greedy for doing it
  • Inexplicably, it seems as though he is winning.
  • People are shocked by this
  • It seems that everyone has their “bailout history” based on the movie “Too Big to Fail” in which the government was assumedly  “shocked” in the fall 2008 with AIG’s issues
  • AIG apparently indemnified the gov’t for its action
  • AIG’s board should held responsible, not the US
  • Should Greenberg win, AIG might be on the hook for the monetary damages
  • Sound about right? Now let’s take each one by one and look at them

  • Yes he is
  • He may be, who cares, I sure as hell don’t. If he wants to spends millions of his own $$ pursuing this, let him..
  • Yes, it appears he is. 99% if people disregarded the suit because they felt he was greedy so they did not bother to look into its merits
  • Yes, they are…because they actually know so little about the lawsuit (it’s linked below)
  • This is FALSE, the fact is AIG was actively engaged with the NYSDFS, and the NY Fed for almost all of 2008 trying to shore up operations and repeatedly asked the NY Fed for assistance through the spring, summer and into the fall of 2008 similar to what was given every other financial institution that requested it….they were repeatedly denied
  • Yes they did….up to a point…
  • As one can see below, AIG’s board was not a party to the original term sheet that was executed and the NY Fed effectively took control of AIG once that term sheet was signed. Therefore, the board cannot be held accountable for an action they did not take
  • This is also false and I will touch on it below
  • For those who want to really know what went down during the AIG bailout please read the link below. It will also explain to you why it appears Starr is winning. The government’s actions in regards to AIG can only be described as “depraved indifference” and one could argue effectively aided in its near collapse (Paulson and Geithner discouraged potential suitors). Please read the document…I promise once you start you will not be able to stop….

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