Former
According to the
Greenberg has publicly blasted the terms of the bailout in the past. In a January column in the Journal, he outlined his opposition. “The $85 billion loan extended to AIG carried an enormously high interest rate of 14.5%,” he wrote. “I believed all along that the government severely overstepped its role by taking preferred stock with an option to convert into AIG common stock as additional consideration for the loan it gave to AIG. All of these transactions and the stock issuance were done without shareholder approval, a clear violation of Delaware law, the state in which AIG was incorporated.”
While AIG has
Tim Massad, Assistant Secretary for Financial Stability at the U.S. Department of the Treasury defended the department’s actions and said it was reviewing the lawsuit. “It is important to remember that the government provided assistance to AIG – and stopped it from collapsing – in order to prevent a meltdown of the entire global financial system,” Massad said in a statement. “Our actions were necessary, legal, and constitutional.”