Judge rules US Federal government was too harsh with AIG

[ksen]

http://www.nytimes.com/2015/06/16/b...out-shorted-aig.html?partner=rss&emc=rss&_r=1

When the Federal Reserve propped up A.I.G. in September 2008, unlike its approach with most of the big banks, it threw out the company’s chief executive and took control of 79.9 percent of the company, nearly wiping out many of its shareholders. Taxpayers got all of their money back, and then some, receiving a profit of more than $20 billion.

But in a stunning ruling, Judge Thomas C. Wheeler of the United States Court of Federal Claims said on Monday that those terms were too “draconian.” In other words, he suggested taxpayers should have offered A.I.G. a more generous deal.

wat

 

[Alcoholic Actuary]

wat


aa

 

[Horatio Parker]

But awarded no settlement.

However, Judge Wheeler concluded that he could not award damages, since Starr International, the investment vehicle that held Hank Greenberg’s AIG stock, had not suffered any economic harm, since the alternative was bankruptcy, in which case Starr’s AIG shares would have been worth nothing.

http://www.nakedcapitalism.com/2015...tepping-its-powers-but-awards-no-damages.html

 

[Jimmy Higgins]

I'll take a Judge that was likely appointed by a Republican for $200 Alex.

 

[Jimmy Higgins]

But awarded no settlement.

However, Judge Wheeler concluded that he could not award damages, since Starr International, the investment vehicle that held Hank Greenberg’s AIG stock, had not suffered any economic harm, since the alternative was bankruptcy, in which case Starr’s AIG shares would have been worth nothing.

http://www.nakedcapitalism.com/2015...tepping-its-powers-but-awards-no-damages.html

Interesting read. Looks like Congress may need to modify a little code, and hopefully never have to use it. The Fall of 2008 was a very special time, where extraordinary means were necessary to keep the house of cards from falling down.

 

[ksen]

I'll take a Judge that was likely appointed by a Republican for $200 Alex.

ding ding ding ding!

http://www.uscfc.uscourts.gov/thomas-c-wheeler

Judge Wheeler was appointed to the United States Court of Federal Claims on October 24, 2005.

 

[dismal]

Why would we assume it was a Republican judge criticizing the wonderful and heroic moves Bush made to save the economy, nay, the world?

 

[ronburgundy]

Why would we assume it was a Republican judge criticizing the wonderful and heroic moves Bush made to save the economy, nay, the world?

Because painting the rich as victims and the Fed as evil is more important to the Republican faith than claiming that everything Bush did was flawless.

A rational, non-kool-aid-drinking judge would have laughed AIG out of court and pointed out that if the Fed bailout arrangement was so damaging, then how could AIG afford to give out almost 1.2 billion in bonuses less than a year later?