Former Fed chairman Ben Bernanke was grilled on Thursday about some of his toughest days in the job.
Bernanke gave a deposition in a case brought by Starr International, the firm controlled by former AIG chairman Hank Greenberg that’s now represented by attorney David Boies. Starr and the ex-chairman are challenging the 2008 bailout of AIG by the Federal Reserve, arguing that the terms of the bailout were unfair to existing shareholders
The bailout saved AIG from filing for bankruptcy. The federal government took 92% of AIG’s shares in return for $152 billion that the Fed and Treasury eventually pumped into the insurer. But when the government took that stake, it greatly diminished the AIG (AIG, Fortune 500) stake held by Starr, Greenberg and other shareholders. Starr and Greenberg sued the government in late 2011.
Taxpayers eventually made a profit of $22.7 billion on the AIG bailout.