The U.S. Court of Federal Claims recently dismissed a multi-billion dollar takings lawsuit brought as a shareholder derivative claim in Starr International Co. v. United States. Starr International sued in November 2011, challenging the Government’s bailout of American International Group, Inc. (AIG) that began in 2008, when Starr was one of the largest shareholders of AIG common stock. Starr alleges that the Government’s actions during the bailout—acquiring control of AIG and then orchestrating a “backdoor bailout” of AIG’s business partners using AIG’s assets—amounted to a taking under the Fifth Amendment’s Just Compensation Clause and an illegal exaction violating the Fifth Amendment’s Due Process Clause. Starr brought shareholder derivative claims for AIG and direct claims for Starr and two classes of AIG shareholders.
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