Maurice R. Greenberg 87, (Hank), A.I.G.'s former chief executive, is basically going crazy.  First, despite his withering criticism of the deal, the government's bail out of AIG was highly successful.  The firm paid back its $182 billion bailout and the government netted more than $22 billion.  Second, AIG's attempt, with his vocal support,  to implicate firms like Goldman and Deutsche Bank for what Greenberg said was their efforts to illegally bring down AIG, was thrown out of court. In addition, Greenberg and his former Chief Financial Officer, Howard Smith, has been the subject of a criminal fraud charge by three NYS Attorney Generals -- starting with Spitzer.  They are being accused of using sham transactions to mask the company's financial position.  The case actually began prior to AIG's financial demise and many, including Greenberg, believe that his attention to fighting the case and ultimate ouster from AIG, was a major cause of the financial discomfort and near liquidation AIG experienced.

Now, Greenberg is leading a shareholder suit against the Government. The $25 billion shareholder lawsuit against the government contends that the onerous nature of the rescue - the taking of what became a 92 percent stake in the company, the deal's high interest rates (14.5%) and the funneling of billions to the insurer's Wall Street clients - deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation."  

In an unusual development, the board of A.I.G. will meet on Wednesday to consider joining the suit.  The choice is not a simple one for the insurer. Its board members, most of whom joined after the bailout, owe a duty to shareholders to consider the lawsuit. If the board does not give careful consideration to the case, Mr. Greenberg could challenge its decision to abstain. Should Mr. Greenberg snare a major settlement without A.I.G., the company could face additional lawsuits from other shareholders. Suing the government would not only placate the 87-year-old former chief, but would put A.I.G. in line for a potential payout. Yet such a move would almost certainly be widely seen as an audacious display of ingratitude. The action would also threaten to inflame tensions in Washington, where the company has become a byword for excessive risk-taking on Wall Street.

Some government officials are already upset with the company for even seriously entertaining the lawsuit, people briefed on the matter said. The people noted that without the bailout, A.I.G. shareholders would have fared far worse in bankruptcy.  Moreover, in view of the fact that AIG has just started running a nationwide advertising campaign with the tagline "Thank you America,” the suit appears ill timed.

For more information, please read [NYT Dealbook, 11/7/13] and [Reuters, 1/9/13].