On April 22, David Boies made his closing argument on behalf of Maurice Greenberg, the insurance magnate suing the U.S. government for as much as $40 billion in damages stemming from the September 2008 bailout of Greenberg’s faltering former company, American International Group. AIG’s soured bets on the housing market had led the insurer to the precipice of insolvency, which might have set off a global depression. In return for an emergency $85 billion loan, AIG’s board agreed to turn over 80 percent of the company’s equity to the government. But Greenberg and fellow shareholders never had a chance to vote on the rescue—which, Boies told Judge Thomas Wheeler of the U.S. Court of Federal Claims in Washington, contributed to an unconstitutional abuse of AIG shareholders.
Given the urgency of AIG’s imminent failure, Judge Wheeler asked, couldn’t the board act on shareholders’ behalf?
