The Federal Reserve Bank of New York urged a federal judge to dismiss Starr International Co.'s lawsuit over the government bailout of American International Group Inc., Bloomberg News reported today Starr, an AIG shareholder that is headed by AIG's founder, Hank Greenberg, claims the government used its 2008 bailout of New York-based AIG to channel money improperly to the insurer's trading partners. John Kiernan, a lawyer for the New York Fed, yesterday told U.S. District Judge Paul Engelmayer in Manhattan that Starr failed to make a demand on AIG's board before filing the suit and that the board's decisions about terms of the bailout loans are notsubject to court review under state law.
