NEW YORK (Bloomberg) — Hank Greenberg won his fight to hold the US responsible for the bitter pill it forced down the throat of American International Group shareholders. But that’s about it.

The judge who called the terms of the $85 billion bailout illegally onerous also ruled that without it investors would have ended up with nothing. As a result, he awarded Greenberg no money.

The split-decision sets up the possibility that both sides will appeal, and that a battle over a key element of the government response to the 2008 financial crisis will continue for months or years to come.

“In the end, the Achilles heel of Starr’s case is that, if not for the government’s intervention, AIG would have filed for bankruptcy,” US Court of Claims Judge Thomas Wheeler said. “AIG’s shareholders would most likely have lost 100 per cent of their stock value.”

What began as a long-shot case by Greenberg’s Starr International Co gained credibility over years of failed government attempts to dismiss it. Last year’s trial was a showpiece for Starr’s lawyer David Boies, who grilled Ben Bernanke, Hank Paulson and Timothy Geithner as Wheeler repeatedly ruled in Greenberg’s favour, telegraphing his ruling yesterday.

Greenberg had sought as much as $40 billion in damages for shareholders. Though the absence of an award may temper the dramatic rebuke of the government handling of the bailout, the ruling may still limit the Federal Reserve’s ability to deal with the next crisis.

“The judge found a way of splitting the baby,” said Josh Stirling, an analyst with Sanford C Bernstein.

AIG rose more than 1.5 per cent to $62.85 in late afternoon New York stock market trading.

Starr sued the US in November 2011, claiming the government broke the law by insisting on 80 per cent of AIG stock and imposing a 14 per cent interest rate on the loan.

Wheeler agreed, saying that while the Federal Reserve had authority to make an emergency loan to AIG, it didn’t have the authority to take shares in exchange for it.

The government countered the demands were justified since the loan was high-risk. As evidence, government lawyers cited similar terms in a private rescue that fell through over doubts about AIG’s ability to repay.

Though the bailout ballooned to $182 billion, AIG returned to the black and repaid the assistance in 2012, leaving the government with a $22.7 billion profit.

Nicole Navas, a spokeswoman for the Justice Department, and Edward Evans, a spokesman for Boies, declined to immediately comment on the ruling.

Wheeler, who presided over the trial without a jury, was often sceptical of the government’s arguments against Starr, AIG’s largest shareholder at the time of the bailout. In a preliminary ruling in 2012, he wrote that he didn’t accept the government’s position that the Fed’s emergency powers allowed it to demand stock.

He granted Starr requests to present evidence of previously confidential correspondence showing that US regulators also doubted their authority to demand stock as part of the bailout.

Bernanke, the former Federal Reserve chairman, and former Treasury Secretaries Paulson and Geithner all testified that the bailout was an extraordinary measure to avoid a collapse that would have been disastrous for the economy.

Geithner headed the New York Fed at the time of the bailout.

Greenberg “had a compelling argument that things happened so quickly that the shareholders didn’t really get an opportunity to evaluate the rescue”, Cliff Gallant, an analyst at Nomura Holdings, said in a phone interview. “I assume there will still be lots of legal wrangling.”