A.I.G. Seeks to Bar Greenberg From Suing U.S. on Its Behalf

Maurice Greenberg, the former chief of A.I.G. Mark Lennihan/Associated PressMaurice Greenberg, the former chief executive of the American International Group.

5:15 p.m. | Updated

The American International Group already ruled out suing the federal government over its bailout during the financial crisis. Now it is asking a federal judge to stop its former chief executive from suing in its name.

The insurer has formally demanded that its onetime leader, Maurice R. Greenberg, stop pursuing so-called derivative claims in his $25 billion lawsuit against the government that would allow him to fight on the company’s behalf.

“A.I.G.’s directors had every right to decide, in the exercise of their business judgment, that suing the government for its rescue of A.I.G. is not the right thing for A.I.G. to do, and that A.I.G.’s interests are better served by focusing on the future and not joining litigation concerning the past,” the insurer said in its filing. “Under well settled Delaware law, Starr cannot usurp the right of A.I.G.’s board to make this business judgment.”

A.I.G.’s request, made late Friday in the Court of Federal Claims in Washington, doesn’t seek to bar Mr. Greenberg’s claims on behalf of himself and other shareholders. The former chief, through his Starr Investment vehicle, has contended that the “onerous” terms of the bailout wrongly cost A.I.G. investors billions of dollars.

But it does note that the company’s directors unanimously chose not to join the lawsuit in January, deeming Mr. Greenberg’s fight unlikely to succeed. The former A.I.G. chief has contended in court filings that the company was under pressure from its savior, the federal government, not to partner with him in the lawsuit.

The prospect of A.I.G. joining the suit prompted a wave of outrage among politicians and the public, leading some lawmakers to excoriate the insurer as “the poster company for corporate ingratitude and chutzpah.”

For its part, the federal government supported A.I.G.’s request in a separate filing, as well as sought the dismissal of Mr. Greenberg’s lawsuit in its entirety.

A lawyer for Mr. Greenberg, Robert J. Dwyer, said in a statement:

“A.I.G.’s motion to dismiss, filed Friday in the Court of Federal Claims, only repeats the position taken by the A.I.G. board in January when it declined to take over and tried to stop Starr from pursuing derivative claims on behalf of the company. Starr intends to oppose that motion in a filing on April 26. In any event, A.I.G.’s motion does not affect the vitality of the direct claims that Starr is pursuing in that action on behalf of a class of A.I.G. shareholders.”

A.I.G.'s Request to Bar Greenberg Derivative Lawsuit