Calling the accusations “worthy of an Oliver Stone movie,” afederal district court judge in New York today dismissed a lawsuitbrought by former American International Group chief executiveMaurice “Hank” Greenberg against the Federal Reserve Board.

Greenberg and his company, Starr International, had charged thatthe Fed acted against the interests of AIG and its shareholderswhen it bailed AIG out starting in September 2008.

The court said arguments by Greenberg and Starr Internationalare “not plausible,” dismissing, amongst other allegations, thatAIG was forced by the N.Y. Fed in Sept. 2008 to pay excessiveamounts to its counterparties to satisfy its obligations undercredit default swap contracts. Starr claimed in the suit that thattransaction served as a “backdoor bailout” by the N.Y. Fed of thesecounterparties.

A spokesman for the N.Y. Fed says the agency would have nocomment. A spokesman for Starr International referred all calls toGreenberg's lawyers at Boies, Schiller and Flexner LLP, New York,who did not respond to requests for comment.

The amended suit was filed November 2011.

Still remaining is a $25 billion lawsuit in the federal Court ofClaims in Washington accusing the U.S. government of engineering anunconstitutional bailout of the insurer. In a preliminary ruling, afederal judge has allowed that suit to proceed.

Greenberg is a major AIG shareholder, and Starr is the originalcompany from which AIG was created. Starr International held a 12percent stake in AIG before a court settlement allowed it to againbecome independent.

“Federal Reserve Bank of New York's motion to dismiss theamended complaint is granted in its entirety,” said Judge Paul A.Engelmayer in a decision filed today in the Federal Court for theSouthern District of New York.

“All of Starr's claims are dismissed with prejudice, with theexception of Starr's takings claim, which was withdrawn, and whichis therefore dismissed without prejudice,” Engelmayer ordered.

At the same time, the judge characterized the suit in colorfulterms.

“Starr's amended complaint paints a portrait of governmenttreachery worthy of an Oliver Stone movie,” Engelmayer said.

In his 89-page opinion, Engelmayer said Starr failed to allegefacts sufficient to carry its heavy burden of calling the trustees'independence from the N.Y. Fed into question.

“Starr claims that, as the global financial system teetered onthe brink of collapse, the N.Y. Fed seized control of AIG,” thejudge said.

“Then, Starr claims, the N.Y. Fed, in an act of Napoleonicplunder, stole AIG's assets, re-distributing some to shore up otherflagging financial institutions while keeping much of the residuefor itself,” the judge said.

“It is, however, one thing to make a sweeping and dramatic claimof government misconduct. It is quite another to pleadplausibly—under the established standards of Delaware law, andbased on concrete factual allegations, as [the law requires]—thatFRBNY exercised control over AIG,” Engelmayer said.

The court held that Starr's claim that FRBNY was a “controllingshareholder” or a “controlling lender” of AIG is not plausible inlight of the facts pled and documents referenced in the amendedcomplaint, the judge said in his opinion.

“Because Starr's fiduciary duty claims are all premised on suchcontrol, those claims must be dismissed,” the judge said.

In his decision, Engelmayer said the facts stated in the case“instead plausibly permit only one conclusion, and it isinconsistent with Starr's thesis of control.”

That conclusion, he said, is that in September 2008, “AIG wasin extremis, and its independent board of directors, tosave the company, voluntarily accepted the hard terms offered bythe one and only rescuer that stood between it and imminentbankruptcy—the NY Fed, ” the opinion states.

“Specifically, based on Starr's own allegations, AIG, as ofmid-September 2008, was in dire straits, whether as a result of itsown business decisions, the unraveling state of the financialsystem, the lack of available liquidity, or a perfect storm ofthese and other factors, and was actively considering bankruptcy;AIG had not found any effective rescuer in its hour of need otherthan FRBNY, and had run out of time to keep looking; and AIG'sBoard, unwilling to accept bankruptcy and the 'public opprobrium'and 'risk of legal liability' that would come with it,acceded—regretfully, and perhaps angrily, but, as a matter of law,voluntarily—to the hard terms on which the NY Fed was willing toextend the $85 billion credit facility,” the decision says.

“Far from describing actual control of AIG by an outside party,these allegations describe a moment of corporate desperation, inwhich AIG's board grabbed the sole lifeline extended to thecompany,” Engelmayer said.

“To be sure, AIG's directors faced wrenching circumstances,” thedecision continues. “But Starr has not pled facts sufficient, underDelaware law, to shift responsibility from the board to the N.Y.Fed for the board's decision to agree to the term sheet and creditagreement. On the facts alleged, as of September 17 and 22, 2008,AIG's directors retained actual control of the company. They—notthe N.Y. Fed—were the ones with fiduciary duties towards AIG andits shareholders.”