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Attorney David Boies on former AIG CEO Hank Greenberg’s lawsuit over the government’s bailout of the insurer.
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Well talk about a Fox Business alert democratic hangs about the -- -- that make history while he's at it.
Judge today clearing the way for Hank Greenberg to sue his old company AIG and by the -- while is that it.
How about the United States federal government that is -- how Uncle Sam seized AIG and whether it was even constitutional what it did so.
No comment yet from AIG or the Justice Department 125 -- about the -- being spearheaded.
By no less -- this Scott -- attorney David -- among the most respected attorneys on the planet.
Well David you've got your work cut out for you what is the argument here.
I think that the main argument is that what the government did in the takeover -- AIG.
Was to take private assets and use it for public purposes without compensating the owners because what everybody knows now.
Is that the government took over AIG not to bail out AIG.
But to use AIG.
As a way of doing a back door bailout of other companies using.
The assets and property on AIG and its shareholders.
Now that could be a public purpose and maybe that was an important thing to do for the economy.
But when the government does that it can't put all of the burden on one company and one cent of shareholders.
We you know this David he -- come back and argue well AIG had all of these and unusual instruments and protections soon.
Insurance conference -- the like to get kind of -- -- little save that.
-- Smart guys like you and -- argue but I I I do think that.
There that there it's it's not just a cut -- icon -- a case like that isn't.
Well in some senses it if it's because one of the things that.
We've alleged in the complaint and that judge relied on and indeed the congressional hearings have established.
Is that when.
The government took control of AIG.
What it did was used AIG's money.
To pay off other creditors that that the government wanted to support like a little Portland some of these other -- religious right.
And there may have been good reasons to do that right but if they're gonna use AIG's assets to do that they've got to compensate AIG.
Okay -- That's really been around that isn't what it that the government lawyers come back and argue well what if the government hadn't been involved at all.
Would David Boise to be here now would what would AIG even exists.
Now they're gonna argue that even to a degree if you're right of his claim that -- -- was uses a piggy bank.
Suit suit to you know funnel money to the likes of Goldman Sachs and and another about a number of other big banks.
That that the end result was AIG today is a round precisely because the government intervene.
-- -- -- -- I think there are two answers to that.
First AIG.
Didn't have a solvency problems AIG had assets -- were vastly larger than its liabilities.
AIG.
Had a liquidity problem.
-- liquidity problem could have been solved by government guarantees.
Like the government gave many of the company's board could have been solved by bankruptcy protection.
Either way you -- to preserve the assets.
So the first answer to that is that.
The AIG shareholders ended up worse off not better off because of the bailout.
So call.
But it's very hard to get money from the government -- -- and I mean -- on and on a good a lot of a lot of companies a lot of companies got a lot of money from the government.
And one of the principles here is that when the government gives out money.
It cannot -- quarter called illegal actions that is it cannot attach illegal unconstitutional conditions that giving out the money.
They could decide not to give out the money.
But if they're going to have a program.
They've got to have a program that does not impose on constitutional constraints.
On individuals and on companies.
And this -- situation in which if the government had simply.
They allowed -- quote AIG and not they -- after taken AIG's assets you might have had a different situation.
But here what they dad was first they took 80% of the stock.
They gave alone but they gave a 14%.
Interest rate on that loan it was fully secured.
They got that money paid back and in addition to that they took 80% of the company for nothing.
Hello it's just confiscation.
And when that courts.
Are faced -- kind of issue.
It's the responsibility of the court to step up and say the government is bound by the rule of law just like any other individual and that's what the -- stock.
Our outlook will lead you the company is still in a -- to taxpayers to that soon depending on whose numbers you believe -- were -- -- 120 billion parent.
And maybe more no I well -- -- amok in the minutes than a lot of that's been paid back are thought then -- 25 billion go.
If you went.
125.
The 25 billion would go to that shareholders.
Whose assets and stock were taken in -- some of it -- also go to AIG the company and then to the shareholders.
There are two claims here one by the shareholders and one on behalf of the company.
AIG itself.
Is she would only phenomenal -- -- simply being sued in order to get it before the court so that the claims that AIG itself has against the government.
Could be vindicated.
Alright David will watch very very closely when you're involves saudis to -- a lot of people's interest.
David thank you very much thank you very much.
