As AIG Trial Begins, Hank Greenberg Makes the Case for Hank Greenberg

Remember the days when American International Group was the largest, most powerful insurance company on the planet? The AAA-rated giant that took on risks and markets that rivals seemed too nervous to touch? No? Well, Hank Greenberg does. The man who built AIG from a bit player into a powerhouse has fought to preserve that legacy since former Attorney General Eliot Spitzer essentially had him ousted in 2005. Today, he’s in the U.S. Court of Federal Claims to challenge the government’s 2008 bailout of his former company.

Technically, the case of Starr International Co. Inc. v. United States is about the legality of Washington’s move to stave off AIG’s bankruptcy in exchange for about 80 percent of common stock. Through Starr, Greenberg still owned about 11 percent of AIG’s shares, making him its largest individual shareholder. That also made him arguably the largest casualty of the deal, which saw taxpayers ultimately gain $22.7 billion in profit from $182 billion in loans. AIG’s existing shareholders, in contrast, got about $500,000 for the $35 billion in shares that went under public control. (The government’s stance is that AIG’s imminent bankruptcy would have left those shareholders with nothing.)