AIG board weighs suing US over bailout
NEW YORK (AP) — AIG is considering Wednesday whether the company should join a lawsuit against the government that spent $182 billion to save it from collapse.
American International Group Inc. said its board of directors will weigh whether to take part in a shareholder lawsuit against the U.S. over the government's $182 billion bailout of the New York-based insurer.
If AIG decides to join the complaint, which seeks $25 billion in damages, it would pit the company against the government that in 2008 kept it from buckling under the weight huge losses on mortgage-backed securities and other toxic assets.
AIG said that after Wednesday's meeting, its directors should have a decision by the end of the month.
Starr International Co. Inc., the investment firm of former AIG CEO Maurice Greenberg, filed the lawsuit in November 2011 on behalf of the firm and AIG shareholders.
The complaint, filed in the U.S. Court of Federal Claims and the U.S. District Court for the Southern District of New York, says that the government didn't provide shareholders fair compensation when it took a nearly 80 percent stake in the insurer as part of the bailout. In doing so, the government violated the Constitution, Starr claims.
AIG said that, by law, its board must consider three options: take over the lawsuit and pursue the claims on its own; attempt to prevent the claims from being pursued by Starr; or, allow Starr to continue to pursue the complaint on AIG's behalf.
The insurer noted that, if it decides not to let Starr pursue its claims on the company's behalf, Starr would likely challenge the move. Under that scenario, if Starr won the case, AIG would not receive any damages or portion of a potential settlement.
The Court of Federal Claims denied a request by the U.S. to dismiss the lawsuit, which means the case will go forward regardless of AIG's participation.
The government came to the rescue of AIG in September 2008, at the depths of the financial meltdown. The New York company did business with hundreds of firms around the world, and officials feared its collapse would wreck the financial system.
All told, AIG's bailout was the largest of the Wall Street rescue packages.
Since the financial meltdown, AIG has undergone a restructuring that has cut its size nearly in half. Its aim is to focus the company on its core insurance operations.
In 2010, the company spun off Asian life insurer AIA Group in Hong Kong's biggest ever initial public offering to raise $20 billion, which was used to pay bailout debt.
In November, AIG reported a third-quarter profit of nearly $2 billion thanks to strength in its insurance operations and investment returns. In the same period a year earlier it lost $4 billion.
The Treasury Department announced last month that it sold all of its remaining shares of AIG, ending up with $22.7 billion more than it funneled to the company during the height of the financial crisis.
Shares of AIG ended regular trading down 28 cents at $35.65. Over the last 12 months, however, the stock is up more than 50 percent.
American International Group Inc. said its board of directors will weigh whether to take part in a shareholder lawsuit against the U.S. over the government's $182 billion bailout of the New York-based insurer.
If AIG decides to join the complaint, which seeks $25 billion in damages, it would pit the company against the government that in 2008 kept it from buckling under the weight huge losses on mortgage-backed securities and other toxic assets.
AIG said that after Wednesday's meeting, its directors should have a decision by the end of the month.
Starr International Co. Inc., the investment firm of former AIG CEO Maurice Greenberg, filed the lawsuit in November 2011 on behalf of the firm and AIG shareholders.
The complaint, filed in the U.S. Court of Federal Claims and the U.S. District Court for the Southern District of New York, says that the government didn't provide shareholders fair compensation when it took a nearly 80 percent stake in the insurer as part of the bailout. In doing so, the government violated the Constitution, Starr claims.
AIG said that, by law, its board must consider three options: take over the lawsuit and pursue the claims on its own; attempt to prevent the claims from being pursued by Starr; or, allow Starr to continue to pursue the complaint on AIG's behalf.
The insurer noted that, if it decides not to let Starr pursue its claims on the company's behalf, Starr would likely challenge the move. Under that scenario, if Starr won the case, AIG would not receive any damages or portion of a potential settlement.
The Court of Federal Claims denied a request by the U.S. to dismiss the lawsuit, which means the case will go forward regardless of AIG's participation.
The government came to the rescue of AIG in September 2008, at the depths of the financial meltdown. The New York company did business with hundreds of firms around the world, and officials feared its collapse would wreck the financial system.
All told, AIG's bailout was the largest of the Wall Street rescue packages.
Since the financial meltdown, AIG has undergone a restructuring that has cut its size nearly in half. Its aim is to focus the company on its core insurance operations.
In 2010, the company spun off Asian life insurer AIA Group in Hong Kong's biggest ever initial public offering to raise $20 billion, which was used to pay bailout debt.
In November, AIG reported a third-quarter profit of nearly $2 billion thanks to strength in its insurance operations and investment returns. In the same period a year earlier it lost $4 billion.
The Treasury Department announced last month that it sold all of its remaining shares of AIG, ending up with $22.7 billion more than it funneled to the company during the height of the financial crisis.
Shares of AIG ended regular trading down 28 cents at $35.65. Over the last 12 months, however, the stock is up more than 50 percent.
So the same thieves who would rape you on interest are whining about interest... As a taxpayer I say if they sue we go after them and take their company from them.. We ( the taxpayer) saved your company and you spit at us like that... Oh no you din't
Well if youâre going to SU the US government, apparently you're not "too big to fail".
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Now went he next housing bubble bursts (and they are blowing it up right now), you will fail just like Lehman Brothers.
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Maybe AIG has a lot of lawyers in families of the board members and they are running out of work. Maybe that's why they are contemplating this suicidal position.
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This is a perfect example of the rampant corruption in corporate America. As my Father used to say as an executive; Right or wrong, business is business and what is legal determines the right for business-none other.
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These endless board rooms is a great place to completely eliminate any type of gun control.
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Some things never change. Â After the first bailout payment to AIG their execs go on a retreat and then come back demanding more taxpayer money. Â After the second bailout payment they give themselves huge bonuses and go on a fox hunt. Â Then Benmosche comes on the scene and calls Congress a bunch of crazies for daring to put limits on executive pay, saying he'll tell those guys to stick it where the sun don't shine. Â Now just days after supposedly changing their tune with a "thank you America" PR campaign they're back to their more familiar "f--- you America" ways with this threat of a lawsuit.
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Justanother1 is right - this company should have been allowed to fail.
Somebody needs to go into this company, shut it down, and sell off the pieces of it THAT WE ALREADY OWN to other companies that didn't put it's grubby hands out for a bailout!!!   They are ridiculous!
We bailed them out (which everyone was totally against) and they are asking us to pay them MORE because they got their butts saved? Â
It's like the scene in "The Incredibles" were Mr. Incredible saved the guy from suicide and then got sued for the saving. It's incredible that AIG is that bold!Â
Should have let them fail.   Still should let them fail.