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AIG Says Defining Risk of Greenberg Suit Is ‘Compound Problem’
by Sonali Basak
June 3, 2015 — 1:51 PM MDT
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American International Group Inc. Chief Executive Officer Peter Hancock said that it’s difficult to quantify the financial risk to the company from former CEO Maurice “Hank” Greenberg’s suit over the insurer’s bailout.
“As I see it, it’s a compound problem,” Hancock said Wednesday in a conference hosted by Deutsche Bank AG. Greenberg’s Starr International Co. has sued the U.S., contending that the 2008 government rescue of AIG cheated shareholders out of at least $25 billion, and the lawsuit’s verdict is expected in coming weeks.
The first variable is whether U.S. Court of Federal Claims Judge Thomas Wheeler rules in Starr’s favor. Then, Hancock said, it depends on the size of damages and whether the government seeks to recover the funds from AIG. The New York-based insurer has said it would defend itself against the government in such a situation.

“As we think about those probabilities together, we come up with an assessment of whether this is a cause for concern,” Hancock said. “Whichever way, it’s not going to be resolved for many years. So, it’s not an immediate liquidity event.”
Credit Suisse Group AG estimates that AIG could fall as much as 3.5 percent if Wheeler rules in Greenberg’s favor. AIG jumped 2.4 percent to $61.12 at 3:43 p.m. in New York trading.

http://www.bloomberg.com/news/articles/2015-06-03/aig-says-defining-risk-of-greenberg-suit-is-compound-problem-?cmpid=yhoo