Starr International Co.'s lawsuit against the Federal Reserve Bank of New York over the government's bailout of American International Group Inc. was dismissed by a federal judge in New York.

Starr, an AIG shareholder headed by the insurer's former chief executive officer, Hank Greenberg, claimed the government used its 2008 bailout of the New York-based company to channel money improperly to its trading partners. U.S. District Judge Paul Engelmayer in Manhattan rejected the claims in a decision that was made public Nov. 16.

Starr sued the New York Fed last November, saying it breached its fiduciary duty to AIG shareholders by loaning $85 billion at 14.5 percent interest while offering better terms to banks in a "backdoor bailout." AIG almost collapsed after bets tied to the housing market soured, and the bailout was revised at least four times before reaching $182 billion.