GREENBERG AMENDS SUIT SEEKING AIG-RELATED COMPENSATION

'Hank' Greenberg, sacked by fellow directors in 2005 as CEO of New York-based insurer AIG, but still a significant shareholder, has amended his legal action that seeks $25bn in damages from the US government following the bailing out of the company in late 2008. The new complaint, claims Bloomberg, quotes an unnamed banker hired to represent the Federal Reserve Bank of New York during the discussions in 2008. The banker is reported to have said to an AIG representative that "these guys are going to try and steal the business". Privately held Starr International Co, controlled by Greenberg and until the bailout the effective pension scheme for senior AIG executives, is suing the government, claiming that the 80% takeover of equity in the insurer was unconstitutional. The Fifth Amendment prohibits the taking of private property for public use without just compensation. Starr International alleges that the rights of shareholders were violated and that they did not have access to due process of law. It also claims that the NY Fed breached its duty to AIG shareholders by loaning the insurer $85bn at 14.5% interest while offering better terms to banks.