Earlier this week, news broke that American International Group Inc. (AIG) was considering joining a lawsuit against the U.S. government over the terms of its multibillion-dollar bailout. Not surprisingly, the fact that AIG would even consider suing a government that forked over $182 billion in 2008 to rescue it from financial collapse was mind-boggling to many.

But everyone can breathe a sigh of relief. AIG announced yesterday it would not be joining the $25 billion suit brought by its former CEO Hank Greenberg’s company Starr International Co. Inc. because, frankly, it’s just icky.

“It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government,” AIG’s current CEO Bob Benmosche told CNBC.

Starr filed the suit in November 2011 claiming the government was in violation of the Constitution when it didn’t provide shareholders fair compensation by taking a nearly 80 percent stake in AIG as part of the bailout agreement. It filed the suit on behalf of AIG shareholders.

It seems unlikely AIG was ever seriously considering joining the suit. The insurer said, however, that by law, it was its fiduciary dutry to its shareholder to consider three options: 1) take over the suit and pursue claims on its own, 2) try to stop Starr from pursuing the claims, or 3) allow Starr to move forward with its suit on AIG’s behalf.

Putting smiles on the faces of many of the suits critics, AIG is opting for Door No. 2 and will try to stop Starr from pursing the claims. Starr’s lawyers, David Boies, said in a statement, however, that that would not be in AIG’s shareholders’ best interest.

“Whether or not the AIG Board will be successful in blocking Starr’s efforts to recover damages for their shareholders will ultimately be decided the Court,” Boies said in his statement.

Read more InsideCounsel stories involving AIG and the financial crisis:

AIG considers joining suit against U.S. government over its bailout

BofA enters multibillion-dollar settlement with Fannie Mae

U.S. government files $1 billion suit against Bank of America

Barney Frank defends JPMorgan against government lawsuit

Homeowners accuse 12 banks of manipulating Libor

Bank of America pays $2.43 billion in shareholder suit settlement

Lehman Brothers to pay another $10.5 billion to creditors

Citigroup will pay $590 million in settlement related to financial crisis