AIG’s Post-Bailout Tax Suit Faces Jury Trial

MANHATTAN (CN) — Since receiving a $182 billion bailout, the American International Group has been roundly mocked for lawsuits demanding more government money, but the insurer’s lawyers agreed on Friday to let a jury decide the last of these cases.
As U.S. District Judge Louis Stanton noted at a hearing this morning, AIG did not have much of a choice.
The government already filed a demand for a jury trial on AIG’s lawsuit from six months after its bailout, which seeks a $306 million refund over tax credits from seven foreign transactions in Ireland, France, New Zealand and elsewhere during the mid-1990s.
The lawsuit has been on a four-year pause since early 2013, when Stantonrefused AIG’s motion for summary judgment, leading to a series of appeals.
Friday morning’s proceedings ending that hiatus opened informally around a conference table, where Judge Stanton presided in a suit instead of his judicial robes.
In a faux-naive tone, Stanton asked the lawyers: “What have you been up to since I saw you last?”
Quite a lot, as it turned out.
Since the parties last met, two other attempts by AIG’s ex-CEO Maurice “Hank” Greenberg — through AIG’s shareholder Starr International Co. — to recover $40 billion in damages over the terms of the government’s bailout crashed and burned. (AIG itself was not a plaintiff these lawsuits, but a storm of public outrage followed a New York Times report from 2013 that its board considered joining them.)
The Federal Reserve conditioned AIG’s rescue on it holding a roughly 80 percent stake in the company.

Read on.

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