AIG

I know it’s almost time to forget about former AIG CEO Hank Greenberg’s lawsuit against the government, since AIG yesterday decided not to join it, but I find myself unable to let go. Over the past couple of days of swirling outrage I’ve spent a lot of time with Greenberg’s complaint, and the Court of Federal Claims opinion refusing to dismiss it, and: the whole thing is so kooky and weird! And not crazy, either; probably wrong, but not nuts. How can we consign it to oblivion just because AIG refused to enrage everyone by backing the lawsuit? Fortunately Greenberg’s lawyer David Boies is running around keeping everyone enraged so I guess we have an excuse:

David Boies, the attorney suing the U.S. over American International Group Inc.’s bailout, said the firm’s takeover was an abuse of authority similar to firefighters seizing possessions they rescued from a flood.

“The fire and rescue people say we’re going to cart them out, we’re going to protect them, but we’re going to take 80 percent of them for the firehouse,” Boies said in an interview today on CNBC. “Everybody would know that was wrong. It’s also illegal.”

Hahaha enraging. But basically harmless enough. It’s the next thing he says that’s really weird: Read more »

Remember yesterday when AIG was going to sue the government for bailing it out? Hahaha yeah that was never going to happen, and today it didn’t:

American International Group Inc.’s directors decided Wednesday not to participate in a lawsuit that accuses the U.S. government of taking advantage of the company in its rescue from the financial crisis. … “The AIG Board has determined to refuse Starr’s demand in its entirety, and will neither pursue these claims itself nor permit Starr to pursue them in AIG’s name,” the company said in a release. …

Mindful of the potential backlash, a number of AIG directors entered Wednesday’s meeting leaning toward rejecting Starr’s request to join its suit, two people familiar with their thinking said

YOU THINK?

If you read as much of the Internet as I do, you probably noticed that a lot of people yesterday freaked the fuck out over the pseudo-fact that AIG was considering joining the lawsuit, brought by its ex-CEO Hank Greenberg and his investment company Starr International, against the U.S. government for basically being too mean in bailing out AIG. Some of these people were regulators, Senators, and Congressmen, three of whom penned this cheery missive to AIG: Read more »

Is AIG going to sue the government for bailing it out? Hahaha no of course not, come on, that would be nuts. So what is this?

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.”

I say unto you that this meeting is not for “consider[ing] joining” that lawsuit, which is one part of former AIG CEO Hank Greenberg’s so-far-not-particularly-successful campaign to get his $25 billion back from the government. (This part, in the Court of Federal Claims, is still going, unlike the part in a New York federal court that was dismissed.) Rather, it is for humoring Hank Greenberg, and the way you humor people who have lots of high-priced lawyers is by giving their high-priced lawyers a chance to talk to other high-priced lawyers for a long time, with PowerPoint. This paragraph in AIG’s court filing is less “we may join the suit” and more “see Hank we are listening to you really carefully and care deeply about what you have to say now, please, go on, this is a safe space”: Read more »

Robert Benmosche: We Showed This World A Thing Or Two

“Dear Colleagues,” Robert Benmosche wrote in a memo to AIG employees today. “We come together as a company to celebrate in good times and we draw together in times of shared crisis. Today warrants a celebration like no other in AIG’s history and places well in the past a crisis none of us will ever forget…Today the US Department of the Treasury has priced an offering of approximately 234.2 million shares of AIG common stock at a price to market of $32.50 per share. Upon the closing of this transaction, expected this Friday, Treasury will have sold the last of its remaining shares of AIG common stock, receiving proceeds of approximately $7.6 billion from the sale. The closing of this transaction will mark the full resolution of America’s financial support of AIG…It is one of the most extraordinary - and what many believed to be the most unlikely– turnarounds in American business history. And you did it…You did this. Every single man and woman at AIG did this remarkable thing. There is a saying in American life, there are no second acts. Well, take a bow, because today marks our second act.” [Dealbook]

What’s good about the dismissal of Hank Greenberg’s AIG lawsuit today is that there’s all this roiling weirdness under the basic story of:

  • The government seized AIG because it was garbage,
  • AIG shareholder, ex-CEO, and general fanboy Hank Greenberg sued the government for destroying the valuable valuable value of his AIG stock, and
  • he lost.

Duh he lost! It’s AIG, it’s become a byword for financial failure. “Don’t pull an AIG,” bankers say to each other, in my lazy imagination. You don’t need to be a lawyer to know that a lawsuit claiming that the government’s bailout stole massive value from AIG shareholders was not going to work. It didn’t! The end.

But there actually was all sorts of crazy nefarious stuff going on; your sympathies may vary but I was ever-so-slightly moved by two of Greenberg’s claims: Read more »

“People are angry because they want to blame somebody else. They don’t take responsibility for their own goddamn lives. ‘I’ve never been promoted, because they don’t like me and there were these guys at AIG, look at them they have free lunches and EZ Pass and look at me I don’t get a free lunch.’ These people make me nuts. Get off your goddamn ass and do something. That’s what the people at AIG did, They picked up their asses and went to work.” [Pressler, related]

After the Great Auto CEO Debacle of 2008, the government had put its foot down on private-jet use by CEOs of TARP-supported companies, and when these onerous restrictions threatened to thwart his ability to make his granddaughter’s birthday party in Chicago, he exploded. “I said to Jim, ‘Here is the deal,’ ” he recalls. “ ‘I’m going to go and see my granddaughter, and I’m going to take that plane and shove it up your fucking ass. And everyone else’s ass. You are going to break my banana over this shit?’ ” [NYM]