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AIG Cites Duty to Consider Joining Suit Against U.S.

Benmosche Says AIG has Duty to Weigh Joining Greenberg Suit
“The Board of Directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said today in a statement from the New York-based insurer. Photographer: SeongJoon Cho/Bloomberg

Jan. 8 (Bloomberg) -- American International Group Inc. has a duty to weigh whether to join a suit by former Chief Executive Officer Maurice “Hank” Greenberg stating that the company’s 2008 U.S. bailout was unconstitutional, the insurer said.

“The Board of Directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said today in a statement from the New York-based insurer.

AIG’s board is scheduled to meet tomorrow to review the case filed by Greenberg against the government in 2011. The ex-CEO has said that the rescue cheated shareholders by diluting their stake in the company. The insurer needed help after it was unable to raise money in equity and bond markets to pay clients who had bought protection against losses on mortgage-related securities.

Benmosche last year repaid the remainder of its $182.3 billion rescue and has purchased ads citing the company’s gratitude for the assistance.

“Tomorrow’s board meeting is about listening to all of the parties involved and gaining a thorough understanding of the issues,” Benmosche said. “We anticipate making a decision in the next several weeks.”

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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