In the week ahead, a Washington, D.C. courtroom revisits the never before taken actions by the U.S. government six years ago. It isn't a mock trial of government intervention but rather a real time lawsuit arguing the government took private property on the cheap.

The case centers on actions taken in the fall of 2008 as the global markets sputtered to a halt, sending the economy into a tailspin. After rescuing dozens of banks, the Federal Reserve provided an $85 billion lifeline to a highly unregulated institution the Fed technically had very little responsibility for: American International Group.

A.I.G. then, as now, was a huge player in the international financial derivative market. The company insured billions of dollars of those esoteric deals and was on the hook when they went south. The Federal Reserve pumped money into the company, backing up its insurance commitments. For its money, the central bank took a majority ownership stake in the company.

A.I.G.'s former CEO Maurice Greenberg saw the federal government commandeer a chunk of his ownership and that of other shareholders. He's suing, claiming the government didn't have the legal authority to take it. And got it at a bargain.

Expected on the witness stand will be a parade of top government players in those dark days; former Treasury Secretaries Hank Paulson and Timothy Geithner and former federal Reserve Chairman Ben Bernanke.

By Tom Hudson

Miami Herald

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