AIG Is Thinking About Suing the Government for Bailing It Out
2013 01 08

By Adam Clark Estes | TheAtlanticWire

It’s been almost five years since AIG’s stock dropped 60 percent in a day leaving the company doomed to failure, when Uncle Sam swooped in with $182 billion to rescue it. But AIG must have a short memory, because on Monday night news emerged that the insurance company is actually thinking about suing the U.S. government over the bailout that saved it. The board will discuss the idea with shareholders at a meeting on Wednesday.

It’s not so much that AIG’s mad the government bailed them out. (They wouldn’t be around to be mad if it hadn’t.) They just wish they’d done it a little bit differently. "The lawsuit does not argue that government help was not needed," The New York Times reports. "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.’" Does that kind of bad attitude count as "looking the gift horse in the mouth" or "biting the hand that feeds you?" Or both?

The timing of AIG’s potential lawsuit is a little bit curious. The company just finished paying the government back about a month ago, when the Treasury Department announced the sale of its last batch of AIG shares -- at a profit nonetheless. Then a week ago, AIG launched a rah-rah ad campaign with the tagline "Thank You America" to show just how much it appreciates taxpayers saving its butt.

But that’s not the message that suing the government for putting up the cash sends, is it? A professor of law and finance at the University of San Diego told The Times, "On the one hand, from a corporate governance perspective, it appears they’re being extra cautious and careful. On the other hand, it’s a slap in the face to the taxpayer and the government."


Article from: news.yahoo.com





Fed in AIG rescue - $85B loan (2008)
By Tami Luhby | CNNMoney.com

Government response reaches dramatic new level: U.S. will take 80% stake in nation’s largest insurer to prevent global financial chaos.

In an unprecedented move, the Federal Reserve Board is lending as much as $85 billion to rescue crumbling insurer American International Group, officials announced Tuesday evening.

The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) the funds. In return, the federal government will receive a 79.9% stake in the company.

Officials decided they had to act lest the nation’s largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

An eventual liquidation of the company is most likely, senior Fed officials said. But with the government loan, the company won’t have to go through a tumultuous fire sale.

"[A] disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the Fed said in a statement.

The bailout marks the most dramatic turn yet in an expanding crisis that started more than a year ago with the mortgage meltdown. The resulting credit crunch is now toppling not only mainstay Wall Street players, but others in the wider financial industry.

[...]

Read the full article at: money.cnn.com






Related Articles
Former AIG chief sues U.S. for $25 billion (Now that’s chutzpah!)
Geithner’s Fed Told AIG to withhold details from the public
Vatican ’Cash Only’, Blocks Credit Cards
Iceland’s Hörður Torfason – How to Beat the Banksters
The Irish Sue the Banks


Latest News from our Front Page

Starbucks Supports Pro-GMO Company
2014 11 26
Another reason why you should not go to Starbucks. Starbucks has an image of being a socially responsible, environmentally friendly company (Really?). In 2013, 95 percent of their coffee was ethically sourced, and their goal is to reach 100 percent by 2015.1 Other goals include reducing water consumption by 25 percent in their company-operated stores by 20152 and mobilizing their employees and ...
Group Polarization and the Fad of Ethno-masochism
2014 11 26
From "Group polarization: A critical review and meta-analysis". Journal of Personality and Social Psychology. 6 50 (6): 1141--1151 The psychology of White self hatred. Political correctness IS a mental disorder. More: Group polarization: A critical review and meta-analysis. Isenberg, Daniel J. the paper Indoctrinate U Harvard Professor Noel Ignatiev talks about how to end the White race The History of Political Correctness The Narrative: The origins of Political ...
Credo: A Nietzschean Testament by Jonathan Bowden
2014 11 26
This lecture by Jonathan Bowden was given at the 11th New Right meeting in London on September 8, 2007. The original title of the presentation was “The Art and Philosophy of Jonathan Bowden.” I think ideas are inborn, and you’re attracted, if you have any, toward certain systems of thinking and sensibility and response. From a very young age, I was ...
A Look Back at the OJ Simpson Verdict -- Reactions
2014 11 26
This is a look back at the different reactions to the OJ Simpson verdict some 20 years ago (exact date of verdict was Oct 3, 1995). The OJ Simpson jury consisted of 9 Blacks, 1 Hispanic, and 2 Whites. It would raise eyebrows after they only deliberated for 4 hours in a case that they were involved in for almost ...
New York Times Publishes Darren Wilson’s Street Address and Photo of House #Ferguson
2014 11 26
Hey here are the two @nytimes scumbags that published Wilson’s home address. —> @juliebosman & @campbellnyt— Ben Howe (@BenHowe) November 25, 2014 Michael Brown’s Stepdad Shouting ‘Burn This Bitch Down’ The New York Times published information about the address of Ferguson Police Officer Darren Wilson on Monday in a move that has generated controversy. Tensions are running high in Ferguson, Missouri, as ...
More News »