Find out how The Garden Law Firm can help you today!
Kevin is on the Board of the National Forest Recreation Association. He has appeared before numerous federal district courts in litigation of government claims and federal land management issues. Contact Kevin to find out how he can help you.
Contact Kevin Today
Government Commits Illegal Exaction In Taking Over Financial Institution But No Damages Are Owed
Your Government counsel.™
A federal court recently found that the government committed an “illegal exaction” when it agreed to provide a loan to AIG during the 2008 financial crisis but only if AIG agreed to give the government an equity share in the company and control its operations. However, because the loan prevented AIG from going bankrupt, the court concluded that AIG was not entitled to any damages as a result of the government’s actions.
AIG was one of the financial institutions on the brink of bankruptcy in 2008. The federal government was concerned that this could trigger an economic collapse, so it provided an $85 billion loan to AIG. However, the conditions for the loan included a 12% interest rate, a 79.9% equity ownership of AIG and the right to install a CEO selected by the government. The court found that “the Government treated AIG much more harshly that other institutions in need of financial assistance” and “singled out AIG as the poster child” for causing the economic crisis in 2008. The court also found that the government had no right to demand an equity share in any company as a condition for a loan or demand that it be able to take over its operations, and that this constituted an illegal exaction.
As the court held, “AIG was at the Government’s mercy” and had to choose between bankruptcy and the Government’s offer. The court found that this same fact also meant that AIG was not entitled to any damages because, but for the loan, AIG would have gone bankrupt.
Share this post
Subscribe to the mailing list
Find out how The Garden Law Firm can help you today!
Temporary Reprieve From Wildfire Insurance Coverage For Forest Service Campground and Day Use Permits
The US Forest Service recently issued a letter asking Regional Foresters to consider requests from holders of campground and day use permits for a one
Forest Service Cancels Campground Prospectus After Erroneously Listing It As A Small Business Set-Aside
The Forest Service recently decided to withdraw a prospectus for a campground permit after the agency had “mistakenly marked” the prospectus as a small business
Forest Service Revises Solicitation For Helicopter Wildfire Support In Light Of Protest
The Forest Service recently cancelled a solicitation for helicopter wildfire support and agreed to review its documentation justifying its proposed evaluation method in light of
Categories
Archives