According to the New York Times’ DealBook page, insurance giant American International Group announced today it will not join a shareholder lawsuit against the same federal government that had rescued it from extinction during the 2008 financial meltdown.
The suit, led by former AIG CEO Maurice R. Greenberg, is seeking $25 billion, alleging that the government’s “onerous” bailout terms prevented shareholders from making billions of dollars as the company emerged from its financial coma.
The Times noted that “A.I.G. directors faced a difficult choice.” That’s putting it mildly, as AIG found itself confronted by a PR firestorm in the days leading up to its decision, when both public and congressional outrage mounted over the company’s possible involvement in the suit. If the company joined the suit, it would have looked like the man who sues the fire department that saved him from a burning home but didn’t return to fetch his stamp collection.
» Read more about: AIG on Suing U.S. Government: “Never Mind” »
There’s a moment in Mordecai Richler’s novel, The Apprenticeship of Duddy Kravitz, in which a Montreal old-timer rapturously recalls the early rise of a shady neighborhood businessman:
“All that time he’s collecting streetcar transfers off the street and selling them, see. Nerve? Nerve.”
Yesterday Americans began reading about a different kind of business nerve. According to the New York Times and other sources, American International Group, the insurance titan and poster child for government bailouts of the financial sector, is considering suing the very government that loaned it $182 billion. AIG’s legal thinking is that, while it was all very good of the Treasury Department and Federal Reserve Bank of New York to come to its rescue, the terms of that rescue inflicted unfairly high losses on the company’s shareholders.
All this comes during a publicity campaign in which AIG has been thanking Americans for saving its skin during the 2008 economic meltdown that led to a long recession.
Mother Jones has unearthed another video in what might be called the One Percent Behaving Badly genre. While not as awesome as the magazine’s previous discovery of footage of Mitt Romney bad-mouthing the half of America who are shiftless parasites, this one will nevertheless fill you with holiday cheer. It shows AIG honcho and white rapper Robert Gifford at a company party in New York, flowing freestyle about his street cred — Wall Street cred, that is. AIG, of course, was the recipient of more than $182 billion of government bailout money in 2008.
Sample lyric, sung to Jay-Z’s “Empire State of Mind:”
Concrete jungle where attitude reigns supreme
There’s nothin’ you can’t do
Now you’re in GRE (GRE!)
Big write offs will inspire you
Preparing business cases will make you feel brand new
» Read more about: Yo Yo Yo! AIG's Definitely in the House! »