Policy

AIG Ponders Lawsuit over Bailout Terms

Complaints about high-interests on loans

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The directors of insurance giant AIG plan to meet Wednesday to consider joining a lawsuit against the US government, arguing that federal officials imposed unfair terms on the company while rescuing it from collapse during the financial crisis.

On its face, the idea sounds preposterous.

Had American International Group (AIG) not been the beneficiary of a federal bailout in 2008, it would have entered bankruptcy and seen shareholder value wiped out, financial experts generally say. To raise legal quibbles over the bailout terms sounds like a stranded hiker, post-rescue, complaining that he was carried to safety in a truck rather than a high-speed train.