This is something I wish I would have created on my satire web site AlteredNews.Com. But no! It’s real!
AIG, you remember, that company that helped get Wall Street into the mess that created the Great Recession, may sue the Federal Government because it argues the bailout terms were too punitive!
The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”
Where to begin?
the taking of what became a 92 percent stake in the company
Which has been sold off and AIG is now a privately owned company, thank you.
the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients
Oh No! You had to pay back your clients… How Horrible! Scandalous!!!!
Note to the greed idiot board-members, especially those long term members…
This is YOUR MESS! YOU OWN IT!!!!
The cost of the bailout for the company may have been high, but I’m kind of thinking the cost of not taking the bailout, which was bankruptcy, would have been far far worse for these stockholders. It saved your and other peoples assets, asses! Pressure to join the original lawsuit is being brought by former AIG CEO Maurice Greenberg, the guy who directed the company to go into the risky and ultimately faulty credit default swap business in the first place. Why are you even listening to him anyway???? Oh, he still owns a large stake in the company.
Note that there were two lawsuits file by Greenberg, because one apparently is just not enough! One of those got thrown out.
A spokesman for the Federal Reserve Bank of New York, Jack Gutt, said, “There is no merit to these allegations.” He noted that “A.I.G.’s board of directors had an alternative choice to borrowing from the Federal Reserve, and that choice was bankruptcy.
A federal judge in Manhattan agreed, dismissing the case in November. In an 89-page opinion, Judge Paul A. Engelmayer wrote that while Starr’s complaint “paints a portrait of government treachery worthy of an Oliver Stone movie,” the company “voluntarily accepted the hard terms offered by the one and only rescuer that stood between it and imminent bankruptcy.”
That point can not be made strong enough… They had a choice – either agree to the bailout, or go bankrupt! The Government didn’t force them to take this deal, they chose to do so.
AIG, up to this point, has done a very good job re-emerging from the bailout.
Overseeing that comeback was a new chief executive, Robert H. Benmosche, a tough-talking longtime insurance executive. Mr. Benmosche has won plaudits, including from government officials, for his managing of A.I.G.’s public relations even as he helped nurse the company back to financial health.
But he and the rest of A.I.G.’s board must now confront an equally pugnacious predecessor in Mr. Greenberg.
The board needs to look Greenberg in the eye and just say thanks, but no thanks. You’ve already done enough damage to our shareholders and this company. Pure greed must not win out over good common sense.
“The A.I.G. board of directors takes its fiduciary duties and business judgment responsibilities seriously,” said a spokesman, Jon Diat.
I hope so.
Hat Tip: SlashDot.
PS. Just a reminder of the poisonous business mentality that festered at that company, even during the bailouts – The Bonus Scandal.
UPDATE: The AIG boardmembers have wisely decided not to join the lawsuit!
Yay! Common sense wins out.
And I started to wonder – Why would Greenberg want AIG to join the lawsuit. After all, if AIG joins, and they win whatever monetary judgement would be split up amongst the AIG board / shareholders and Greenberg would get less. Greenberg could be trying to get his old job back. I think it’s more likely that this case is a loser, and he knows it. Bringing in AIG would mean a large third party would be sharing the cost of the lawsuit, and Greenberg and his other company would not be on the hook, at least not as much, for the cost of paying for a failed lawsuit.
I can prove none of this, but, knowing the level of pure greed through which these guys operate, it wouldn’t surprise me at all.