NU Online News Service, July 9, 11:00 a.m.EDT

The Federal Reserve Board of New York has asked a federal courtin Manhattan to dismiss a lawsuit filed by Maurice Greenbergrelated to how the government provided financial aid to AmericanInternational Group in 2008.

The suit, filed in the Federal Court for the Southern District,alleges that the federal government “discriminated” againstAmerican International Group by taking it over rather than loaningit money when it ran into financial problems in September 2008.

The request, filed on Monday last week, is separate from aruling also made on Monday, by a judge in the Federal Court of Claimswho cleared a suit filed in Washington seeking money from thegovernment on behalf of Starr and shareholders.

In the New York filing, lawyers for the Fed said one of itsreasons the suit should be dismissed is that the actions of thefederal government, including those of the Federal Reserve Bank ofNew York, brought the company back from the brink ofbankruptcy.

“In September 2012, four years will have elapsed since FRBNYtook decisive, affirmative, historic actions to rescue AIG frombankruptcy,” the filing says.

“By now, it is clear that the AIG rescue avoided potentiallycatastrophic consequences to the national and global economies fromAIG's bankruptcy,” the filing continues.

“The bankruptcy of AIG would have inflicted substantial hardshipon thousands of Americans, including those who, absent a rescue,would have lost their AIG jobs,” the filing said.

The New York suit, filed in the Federal Court for the SouthernDistrict, alleges that the federal government “discriminated”against AIG by taking it over rather than loaning it money when itran into financial problems in September 2008.