A New York Fed underling helped save AIG. Now, he's going to help it win $10 billion from Bank of America.
Bank of America previously cited December 2012 testimony from James Mahoney, one of the New York Fed's lead negotiators on the Maiden Lane II deal.
Mr. Mahoney said that when the Fed bailed out AIG, it intended to receive the rights to all future legal claims.
But on March 18, Mr. Mahoney told AIG's lawyers: "I was really just concerned about moving all the upside and recourse over to the Fed. I didn't contemplate taking something away."
He also said he never discussed with anyone the idea that "AIG was somehow giving up its [tort] claims."
Mr. Mahoney explained the discrepancy in his testimony by saying he spent "less than 10 minutes" discussing a document prepared by Bank of America that asserted AIG had given up all legal claims in the bailout.
AIG Says Fed Employee Reversed Testimony on BofA Case [WSJ]
Meet James Mahoney: The NY Fed Employee at Center of AIG-BofA Fight [WSJ Deal Journal blog]