The lawsuit, filed in 2011 by major shareholder and former AIG Chief Executive Officer Maurice Greenberg, alleges terms of the $182 billion bailout of the firm cost shareholders tens of billions of dollars.
The lawsuit alleges the government used the bailout -- part of the Trouble Asset Relief Program administered in response to the financial sector meltdown in 2008 -- to pay off AIG creditors at full value while exacting a heavy price on AIG, which had to sell valuable assets to repay the government. The suit calls that a "back door bailout."
Greenberg has pressured the AIG board to consider joining the lawsuit, Forbes magazine reported Tuesday.
The government says TARP rescued the financial system and in some cases earned taxpayers a profit. In AIG's case, the government has said it made $22 billion on the deal at 14 percent interest.
AIG recently paid off the government and has begun a marketing campaign with the tagline "Thank you, America."
Joining the lawsuit, however, may backfire in the court of public opinion, Forbes said. On the other hand, should AIG refuse to join the lawsuit, shareholders could sue the company for missing a big opportunity if Greenberg wins his case.
White House press secretary Jay Carney told reporters Tuesday he would not comment on the pending lawsuit and deferred to the Justice Department.
Carney said the federal government "acted in a bipartisan fashion to prevent the disorderly failure of AIG after concluding that such a failure would have caused catastrophic damage to the economy and financial system." He also noted the bailout's outcome not only led to the stabilization of the economy and AIG's survival, but a $22.7 billion in profit for taxpayers.
"It is also worth remembering, in response to a question like this, that thanks to the action of the president, thanks to the action of the administration and Congress, an action like the kind that was taken to deal with AIG's potential disorderly failure, however necessary during the financial crisis, should not happen again, and that's why this president pursued Wall Street reform," Carney continued. "And that's why it is essential to continue to move forward with the implementation of that reform."
He declined to comment when asked if he would urge AIG's board to back away from the lawsuit or if the president is aware of it.