The ripples of the financial crisis that spun out of control in the fall of 2008 are now being felt as shareholder suits progress through the judicial system. Maurice "Hank" Greenberg is not only AIG's former CEO, his company, Starr International Co., had a 12% stake in AIG, making it AIG's largest shareholder. Last week, the Second Circuit dealt a blow to one of his two cases in federal court, reports Reuters.
2008 Financial Crisis
In September 2008, AIG alerted the Federal Reserve Bank of New York ("FRBNY") that it may have to file for bankruptcy. To avoid further financial catastrophe, the FRBNY entered a credit agreement with AIG to prevent bankruptcy, effectively giving the federal government an 80% interest in AIG's common stock. Successive financial vehicles and agreements were utilized as rescue deals to prevent AIG from failing.