That's rich! Former boss of bailed-out insurance giant AIG sues U.S. for $25billion



Controversial: Former AIG CEO Maurice Greenberg

Former American International Group CEO Maurice 'Hank' Greenberg thinks he got a raw deal, and he wants the government to pay up.

Greenberg filed a lawsuit in the U.S. Court of Federal Claims insisting that the government bailout and takeover of the insurance giant was an unconstitutional grab of private property.

His Starr International Co., which used to be AIG's biggest stakeholder, is seeking $25 billion in damages, The Wall Street Journal reported on Monday.

The figure was based on the value of the 80 per cent stake in AIG the government took over after handing it a bailout to the tune of $182 billion.

The payout allowed AIG to pay off companies like Goldman Sachs in full and reward executives with $165 million in bonuses in 2008.

The bonuses were handed out even though AIG lost $61.7 billion in the fourth quarter of that year.

That brought anger from both the public and investors.

AIG's own value plummeted and it was reduced to selling off assets to pay back the government, both moves of which hurt Greenberg's stake in the company, msnbc.com reports.

The Treasury Department called the government's intervention 'necessary, legal, and constitutional' in a statement issued Monday afternoon.

'We are reviewing the lawsuit and expect to defend our actions vigorously,' it said.

Greenberg has had a bust-up with both the government and his former company before.

Greenberg left AIG in 2005 when the Attorney General at the time Eliot Spitzer launched an accounting fraud investigation.

In 2009, Greenberg paid $15 million to the Securities and Exchange Commission for accounting violations.