Wetcoaster Posted January 9, 2013 Share Posted January 9, 2013 File this one under the "No good deed goes unpunished" heading. Remember when American International Group Inc (AIG),an insurer which rescued from bankruptcy by the U.S. government in 2008 with a bailout that ultimately totaled $182 billion? AIG seemed thankful for the help and even broadcast thank you ads: AIG is now considering suing the US federal government alleging the terms of the deal were unfair. The news prompted a swift reaction from one of AIG's rescuers, with the Federal Reserve Bank of New York saying the insurer could have just as well chosen bankruptcy four years ago and wiped shareholders out entirely. The move would be something of a shock development given that AIG just launched a high-profile television ad campaign called "Thank you, America," in which it offers the public its gratitude for the bailout. At the same time, Chief Executive Bob Benmosche has complained that the company and its management have not gotten enough credit for avoiding a collapse, turning the business around and returning to profitability. AIG confirmed on Tuesday that its board would meet Wednesday to discuss joining a lawsuit filed against the government by the insurer's former chief executive, Maurice "Hank" Greenberg. Greenberg, whose Starr International owned 12 percent of AIG before its near-collapse, has accused the New York Fed of using the rescue to bail out Wall Street banks at the expense of shareholders, and of being a "loan shark" by charging exorbitant interest on the initial loan. A federal judge in Manhattan dismissed Greenberg's suit in November; a separate suit under different legal theories in the U.S. Court of Federal Claims is still pending. "There is no merit to these allegations. AIG's board of directors had an alternative choice to borrowing from the Federal Reserve and that choice was bankruptcy. Bankruptcy would have left all AIG shareholders with worthless stock," a representative of the New York Fed said Tuesday. A source familiar with the situation said lawyers for the New York Fed expect to attend the Wednesday board meeting to argue their side of the matter. http://www.huffingto..._n_2431045.html And from CBS Moneywatch: American International Group's (AIG) board of directors is meeting today to decide whether it should join a lawsuit against the U.S. government over the $182.5 billion infused into the insurance giant in 2008 and 2009. Meanwhile, AIG is running an advertising campaign it dubs "thank you, America," In my view, this may yet turn out to be the best example of "no good deed goes unpunished." Let me take you back to AIG's 2008 annual report, where it posted a $99 billion loss. This is not a typo -- that's nearly a tenth of a trillion dollars. How did such brilliant minds lose such a staggering amount? They bet the farm on insuring a kind of financial derivative called credit default swaps. By September 2008, AIG's stock had plummeted 95 percent, and its credit rating had plunged. AIG's access to capital had dried up, and I happen to agree with the Bush Administration's decision to inject taxpayer dollars into the company. Without TARP, we may be using the bartering system today. AIG is not a victim of the financial crisis. To the contrary, they were perhaps the largest player in the short-term greed that created the crisis. As the financial crisis was worsening, I pointed out that my dog Max, awarded a plaque as America's top financial planner, made $99 billion more than the geniuses of AIG in 2008. While I'm glad AIG repaid us taxpayers with a profit, let's put it in perspective. A $22 billion profit on a $182.5 billion investments amounts to a 12 percent rate over about a four-year period. In my book, that's a pretty good rate for a company that would have gone bankrupt without it. In my view, we taxpayers should be the ones suing the AIG management that led us to the near financial collapse. Let there be no doubt, I will not be starting a marketing campaign saying "thank you, AIG." http://www.cbsnews.c...e-you-in-court/ Link to comment Share on other sites More sharing options...
Squeak Posted January 9, 2013 Share Posted January 9, 2013 I guess they are biting the hand that feeds. Link to comment Share on other sites More sharing options...
Tearloch7 Posted January 9, 2013 Share Posted January 9, 2013 The hypocrisy of this whole situation is a reflection of the whole Wall Street/1% solution .. let them eat crumpets .. Link to comment Share on other sites More sharing options...
dudeone Posted January 9, 2013 Share Posted January 9, 2013 Amid public rage, AIG opts out of U.S. government lawsuit By Ben Berkowitz | Reuters – 1 hr 7 mins ago http://news.yahoo.com/aig-says-not-join-lawsuit-against-u-government-201052589--finance.html (Reuters) - The board of American International Group Inc decided on Wednesday not to join a lawsuit against the U.S. government over the terms of the company's bailout, following two days of fevered backlash from Congress and the public over the prospect. AIG had been weighing whether to join a lawsuit filed by its former chief executive, Hank Greenberg, and his company Starr International, which owned 12 percent of the insurer before its 2008 rescue. Greenberg alleges the rescue was unfair to shareholders, and that the Federal Reserve Bank of New York charged an excessive interest rate on its initial loan. He has sought billions of dollars in damages. AIG said the board carried out its legal and fiduciary duty to consider the possibility of joining Greenberg's suits before making its decision. "America invested in 62,000 AIG employees, and we kept our promise to rebuild this great company, repay every dollar America invested in us, and deliver a profit to those who put their trust in us," Chairman Steve Miller said in a statement. AIG said it would not pursue Starr's claims nor would it allow Starr to pursue them on AIG's behalf, which sets the stage for a fresh legal fight between Greenberg and the company. The idea AIG might sue the government struck a raw nerve with the public, which took to the Internet to vent its anger at what it viewed as the company's audacity. The volume of AIG mentions on Twitter rose more than 50-fold Tuesday, according to Topsy Analytics. Former Obama administration adviser Austan Goolsbee said "GO SCREW YOURSELVES" in a multi-tweet tirade. Comedian Andy Borowitz drafted a mock letter from the company to taxpayers, asking for more bailout money to pay for the cost of the lawsuit. Dozens of obscene comments made descriptive references to the anatomy of Chief Executive Robert Benmosche. And those were the gentler barbs. The New York Daily News ran an editorial cartoon in which a lifeguard saves a drowning man with "AIG" on his belly. When the lifeguard asks the man how he feels, the victim says, "like suing you." The vitriol was just like in late 2008 and early 2009, shortly after the bailout, when AIG employees hid ID badges and their families were threatened amid an uproar over post-rescue bonuses. A group of congressmen led by Vermont Democrat Peter Welch sent AIG's chairman a letter late Tuesday, advising, "Don't do it. Don't even think about it." Other members of Congress threatened hearings. AIG took to Twitter to defend itself, saying it was legally obligated to at least consider action. But its defence mostly fell on deaf ears. The government rescued the company from the brink of bankruptcy in September 2008 with a bailout that ultimately topped $182 billion (114 billion pounds). After a recapitalization deal closed in early 2011, the U.S. Treasury owned 92 percent of AIG. Treasury sold the last of that stake in mid-December. All totalled, the government has said it earned a return of $22.7 billion on the rescue. AIG shares were flat at $35.65. The stock lost half its value in 2011 but then rose more than 50 percent in 2012, as it showed consistent profitability. (Additional reporting by Karen Freifeld in New York; Editing by Jeffrey Benkoe and Nick Zieminski) Link to comment Share on other sites More sharing options...
Lancaster Posted January 9, 2013 Share Posted January 9, 2013 Another reason why government should stay away from the affairs of private businesses. Link to comment Share on other sites More sharing options...
Buddhas Hand Posted January 9, 2013 Share Posted January 9, 2013 Another reason why government should stay away from the affairs of private businesses. Link to comment Share on other sites More sharing options...
ronthecivil Posted January 9, 2013 Share Posted January 9, 2013 As much as AIG even considering to sue the US government over the rescue is douchebaggery of the highest order simply allowing them to go bankrupt would very much repeat history. The history of the great depression. As for the loan itself the US got all it's money back and 22.7 billion extra for the effort. Not a bad capital gain! Link to comment Share on other sites More sharing options...
Buddhas Hand Posted January 9, 2013 Share Posted January 9, 2013 As much as AIG even considering to sue the US government over the rescue is douchebaggery of the highest order simply allowing them to go bankrupt would very much repeat history. The history of the great depression. As for the loan itself the US got all it's money back and 22.7 billion extra for the effort. Not a bad capital gain! Link to comment Share on other sites More sharing options...
ronthecivil Posted January 9, 2013 Share Posted January 9, 2013 Not sure if my intention is clear but obviously regulation is needed and the bail out was a good (in fact profitable for the government - win/win) idea. Link to comment Share on other sites More sharing options...
Wetcoaster Posted January 10, 2013 Author Share Posted January 10, 2013 It sounds like AIG got the message loud and clear from the public backlash and utter loathing and disdain when they were considering joining the lawsuit and they have now decided to not do so. AIG won't join ex-CEO Maurice "Hank" Greenberg's lawsuit against the U.S. government over the insurance giant's financial crisis bailout, the Wall Street Journal is reporting. AIG’s board met Wednesday to hear a pitch from Greenberg, asking the company to join his $25 billion lawsuit accusing the government of violating shareholders’ rights by bailing out the company. Greenberg filed the suit in 2011, and it claims that the terms of the bailout -- including giving billions to AIG’s clients, the government taking a more than 90 percent stake in the company and the deal’s steep interest rates, stripped shareholders of tens of billions of dollars -- according to The New York Times. Despite the complaints, the government weakened the terms of the deal shortly after the bailout, perhaps to the benefit of shareholders, according to a separate NYT report. After the NYT reported Monday night that the insurance giant was considering joining Greenberg's suit, Washington policymakers lashed out at AIG. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke were "furious" about the possibility of an AIG lawsuit, according to Politico. Sen. Elizabeth Warren (D-Mass.) said in a statement on Tuesday that "it would be outrageous for this company [AIG] to turn around and sue the federal government because they think the deal wasn't generous enough." And Austan Goolsbee, a former top economic adviser to President Barack Obama, lashed out on Twitter. "Dear AIG, Hi, I'm one of the 300m Americans whose $ saved you. I think I speak for all of us (incl your moms) when I say GO SCREW YOURSELVES," he wrote. http://www.huffingtonpost.com/2013/01/09/aig-lawsuit_n_2441618.html Link to comment Share on other sites More sharing options...
ronthecivil Posted January 10, 2013 Share Posted January 10, 2013 It sounds like AIG got the message loud and clear from the public backlash and utter loathing and disdain when they were considering joining the lawsuit and they have now decided to not do so. AIG won't join ex-CEO Maurice "Hank" Greenberg's lawsuit against the U.S. government over the insurance giant's financial crisis bailout, the Wall Street Journal is reporting. AIG’s board met Wednesday to hear a pitch from Greenberg, asking the company to join his $25 billion lawsuit accusing the government of violating shareholders’ rights by bailing out the company. Greenberg filed the suit in 2011, and it claims that the terms of the bailout -- including giving billions to AIG’s clients, the government taking a more than 90 percent stake in the company and the deal’s steep interest rates, stripped shareholders of tens of billions of dollars -- according to The New York Times. Despite the complaints, the government weakened the terms of the deal shortly after the bailout, perhaps to the benefit of shareholders, according to a separate NYT report. After the NYT reported Monday night that the insurance giant was considering joining Greenberg's suit, Washington policymakers lashed out at AIG. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke were "furious" about the possibility of an AIG lawsuit, according to Politico. Sen. Elizabeth Warren (D-Mass.) said in a statement on Tuesday that "it would be outrageous for this company [AIG] to turn around and sue the federal government because they think the deal wasn't generous enough." And Austan Goolsbee, a former top economic adviser to President Barack Obama, lashed out on Twitter. "Dear AIG, Hi, I'm one of the 300m Americans whose $ saved you. I think I speak for all of us (incl your moms) when I say GO SCREW YOURSELVES," he wrote. http://www.huffingto..._n_2441618.html Link to comment Share on other sites More sharing options...
dudeone Posted January 13, 2013 Share Posted January 13, 2013 AIG sues NY Fed over right to sue Bank of America, others By Jonathan Stempel | Reuters – 22 hrs ago http://news.yahoo.com/aig-sues-ny-fed-over-sue-bank-america-020011346--finance.html NEW YORK (Reuters) - American International Group Inc has filed a lawsuit against a vehicle created by the Federal Reserve Bank of New York to help bail out the insurer, in a bid to preserve its right to sue Bank of America Corp and other issuers of mortgage debt that went sour. The complaint filed in the New York State Supreme Court in Manhattan seeks a declaration that AIG has not transferred billions of dollars of "litigation claims" to Maiden Lane II, including many related to the insurer's $10 billion lawsuit against Bank of America. Maiden Lane II was created in December 2008 to buy residential mortgage-backed securities (RMBS) from AIG and ease liquidity strains. According to the complaint, New York Fed officials in December told Bank of America that Maiden Lane II had, by agreeing to buy the securities, assumed from AIG all litigation claims relating to what it bought. AIG said this included more than $7 billion of damages claims against Bank of America. AIG is not seeking monetary payments in the lawsuit, but wants the court to clarify that the New York-based insurer still has the right to sue issuers of securities in Maiden Lane II. New York Fed spokesman Jack Gutt declined to comment. Bank of America spokesman Lawrence Grayson also declined to comment. The lawsuit is part of the fallout from AIG's $182.3 billion federal bailout that began in September 2008, and which was fully paid off last year. It came after AIG provoked a firestorm in Congress and from the American people this week as it mulled whether to sue the government that bailed it out by joining a $25 billion lawsuit by former Chief Executive Maurice "Hank" Greenberg. AIG eventually decided to stay out of that case. When it sued Bank of America in August 2011, AIG accused the Charlotte, North Carolina-based lender of misrepresenting the quality of more than $28 billion of securities it had bought from the bank and its Countrywide and Merrill Lynch units. An AIG spokesman said Friday's lawsuit "narrowly seeks a declaration from the Court that a 2008 contract between AIG and ML II did not transfer to ML II AIG's right to sue Bank of America and other financial institutions for the billions of dollars of damages they caused AIG and its shareholders in connection with the fraudulent sale of RMBS to AIG." According to Friday's complaint, Maiden Lane II paid $20.8 billion for a variety of subprime and other mortgage securities from AIG, barely half of their estimated $39.3 billion face value. The case is American International Group Inc et al v. Maiden Lane II LLC, New York State Supreme Court, New York County, No. 650115/2013. (Reporting by Jonathan Stempel in New York; Editing by Gary Hill) Link to comment Share on other sites More sharing options...
NightHawkSniper Posted January 13, 2013 Share Posted January 13, 2013 Lets just make a "AIG Sue" Section for CDC Link to comment Share on other sites More sharing options...
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