Hank Greenberg AIG Suit, Bull Market Next Spring?
For those of you not paying attention to the Financial News, we've got an important case that could alter the market next Spring. Why next Spring? This is when a decision will be made as to who will pay or not pay Hank Greenberg and others up to $40 billion dollars. Not only that, if the US Government is on the hook for some or all of the award, it could allow others to sue the US Govt for violating constitutional and contract laws during the Financial Crisis. Greenberg's argument is that shareholders we're not given just compensation for when the terms were agreed upon by US Government and AIG. If the judge in this case decides that US Government did not abide by the law during these takeover, we could be talking about hundreds of billions of dollars being paid to former shareholders from other takeovers to prevent supposed bankruptcies. $700 Billion Dollars were used in 2008-2009 to bailout many companies. US Government profited by $22.7 billion from the AIG takeover. US Government also profited from other companies such as Bank of America and Citigroup.
From Bloomberg By Andrew Zajac and Christie Smythe
...In consideration for an $85 billion LOAN FROM the Federal Reserve Bank of New York, the insurer had to agree to a 14 percent INTEREST RATE and a demand for an 80 percent government equity stake, arrangements that cost shareholders as much as $40 billion, Greenberg claimed. Led by attorney David Boies, Starr’s lawyers argued AIG investors deserve that money back.
The AIG bailout ballooned to $182 billion. The New York-based insurer eventually returned to profitability and repaid the assistance in 2012, leaving the government with a $22.7 billion profit.
In the trial, the U.S. argued that it had authority to demand equity, and that the bailout was voluntarily agreed to by AIG’s board as a preferable alternative to BANKRUPTCY.
Boies, 73, has used government correspondence to argue that, instead of being a hedge against risk as U.S. lawyers argued, the stiff costs of THE LOAN were an attempt to make money.
Much of the case has focused on Starr’s allegations that the government coerced AIG’s board into accepting the bailout, and EXERCISED control of the company at key moments afterward.
Those elements are crucial to Starr’s claim the government took shareholders’ property without just compensation, in violation of the U.S. Constitution.
Spring Verdict
Wheeler gave both sides until next week to finish submitting evidence, including material from the trove he forced the government and others to produce. He set a Feb. 9 deadline for both sides to file conclusions of law, with closing arguments to follow as soon as March.
From Bloomberg By Andrew Zajac and Christie Smythe
...In consideration for an $85 billion LOAN FROM the Federal Reserve Bank of New York, the insurer had to agree to a 14 percent INTEREST RATE and a demand for an 80 percent government equity stake, arrangements that cost shareholders as much as $40 billion, Greenberg claimed. Led by attorney David Boies, Starr’s lawyers argued AIG investors deserve that money back.
The AIG bailout ballooned to $182 billion. The New York-based insurer eventually returned to profitability and repaid the assistance in 2012, leaving the government with a $22.7 billion profit.
In the trial, the U.S. argued that it had authority to demand equity, and that the bailout was voluntarily agreed to by AIG’s board as a preferable alternative to BANKRUPTCY.
Boies, 73, has used government correspondence to argue that, instead of being a hedge against risk as U.S. lawyers argued, the stiff costs of THE LOAN were an attempt to make money.
Much of the case has focused on Starr’s allegations that the government coerced AIG’s board into accepting the bailout, and EXERCISED control of the company at key moments afterward.
Those elements are crucial to Starr’s claim the government took shareholders’ property without just compensation, in violation of the U.S. Constitution.
Spring Verdict
Wheeler gave both sides until next week to finish submitting evidence, including material from the trove he forced the government and others to produce. He set a Feb. 9 deadline for both sides to file conclusions of law, with closing arguments to follow as soon as March.