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.
Jan. 9 (Bloomberg) -- American International Group Inc. said it has a duty to weigh joining a suit by former Chief Executive Officer Maurice “Hank” Greenberg that claims the insurer’s 2008 U.S. bailout was unconstitutional. “The board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said yesterday in a statement.
At a recent hearing, Timothy Geithner – former president of the Federal Reserve Bank of New York – expressed his views on the 2008 American International Group Inc. (AIG) bailout. He said that the bailout was essential for the troubled insurer and a failure could have been “catastrophic,” potentially leading to “mass panic.” During the hearing, Mr. Geithner retreated from some of his earlier statements regarding the bailout.
Contrary to proponents of anointing such professionals as ‘gatekeepers’ who police against corporate misconduct, the AIG story shows how such custodians run amok
American International Group Inc, the insurer rescued by the U.S. government in 2008 with a bailout that ultimately totalled US$182 billion, may join a lawsuit against the government alleging the terms of the deal were unfair.
While Ackman and Loeb battle it out over HLF, the other potentially firework-prone battle has died an ignominious death. The WSJ reports that AIG has generously decided not to bit the Treasury hand that fed it just a few short years ago:
American International Group Inc (AIG) yesterday announced that Peter D. Hancock – who had joined the insurance company in 2010 to overlook finance and risk – will be its new president and CEO effective September 1. Hancock, 55, has headed up the company’s property casualty division, where he had been assigned in 2011.