NEW YORK (TheStreet) -- Shares of American International Group (AIG) are gaining by 2.38% to $63.36 in mid-afternoon trading on Monday, after a federal judge ruled that the U.S government was acting outside the bounds of its authority in regards to the 2008 bailout of the insurance company, The Wall Street Journal reports.
Former AIG Chief Hank Greenberg sought to win at least $25 billion in damages for shareholders, according to Bloomberg.
The U.S demanded a 79.9% equity stake in the then struggling company in exchange for giving it an $85 billion loan with a 14.5% initial interest rate.
"The government's unduly harsh treatment of AIG in comparison to other institutions seemingly was misguided and had no legitimate purpose," Judge Thomas Wheeler of the U.S. court of Federal Claims wrote in his opinion, The Journal noted.
The judge ruled in Greenberg's favor, but didn't award any damages at the conclusion of the trial. Wheeler found the government's argument, that AIG's only alternative to a bailout would have been a bankruptcy filing that could have left shareholders with nothing, valid, The Journal said.
Separately, TheStreet Ratings team rates AMERICAN INTERNATIONAL GROUP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERICAN INTERNATIONAL GROUP (AIG) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."