Court Declares AIG's Bailout Doesn't Equal Default

Law360, New York (September 30, 2010, 5:55 PM EDT) -- American International Group Inc. has managed to nix a key claim from a suit brought by a real estate investment firm seeking to avoid paying the $1.2 billion it allegedly owes the troubled insurance giant.

Judge Paul G. Gardephe of the U.S. District Court for the Southern District of New York dismissed on Thursday an allegation that AIG had defaulted on a credit swap agreement with Brookfield Asset Management Inc. when it accepted a government bailout.

“Defendants’ interpretation of the swap agreement is supported by its...
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