NEW YORK (Reuters) – A federal judge has put American International Group Inc's dispute with a financial crisis-era bailout vehicle on hold while another court addresses the insurer's separate $10 billion lawsuit against Bank of America Corp over defective mortgages.
In rejecting AIG's effort to litigate quickly against the Maiden Lane II vehicle created by the Federal Reserve Bank of New York, U.S. District Judge Lewis Kaplan said that "on the face of it" some of the New York Fed's and Maiden Lane's actions "perhaps are unattractive and, indeed, wrongful."
The dispute concerns whether AIG transferred $18 billion of litigation claims to Maiden Lane, which the New York Fed created in December 2008 to buy residential mortgage securities from AIG as part of that company's rescue three months earlier.
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