'If AIG Decides To Sue, People Will Burn That Headquarters To The Ground!'
Neil Barofsky on the AIG bailout lawsuit.
Jan. 8 (Bloomberg) -- Neil Barofsky, former special inspector for the U.S. Treasury's Troubled Asset Relief Program and a Bloomberg Television contributing editor, talks about the likelihood that American International Group Inc. will join a shareholder suit alleging its 2008 bailout was unconstitutional. AIG's board is scheduled to meet tomorrow to review whether it should join a case brought in 2011 by former Chief Executive Officer Maurice "Hank" Greenberg.
Right on cue, the AIG Board has just voted NOT to join Greenberg's lawsuit....
“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 insurer said today in a statement. The insurer’s board met today to hear arguments from Starr and the U.S. over whether the company should join the case, which claims the rescue of AIG violated shareholders’ rights. New York-based AIG received a $182.3 billion bailout to save it from collapse during the 2008 financial crisis, after it fell short of money to pay clients who bought protection against losses on securities linked to home loans.
Allowing the suit to go forward would have been “reputational suicide,” for AIG, James Cox, a law professor at Duke University, said in an interview before the announcement. “You’re essentially suing the hand that had fed you and rescued you from financial collapse, and I don’t think there’s any way to tell that story in any other way.”
The board’s vote was unanimous, AIG CEO Robert Benmosche said in a phone interview. The insurer will file a formal statement in court explaining the board’s decision in the “coming weeks,” according to the statement.
Photo and commentary by William Banzai7...
You see that jackass cleaner peeking through the window?
Someone should ask him why he was too busy making sure Goldman got paid 100 cents on the squid dollar instead of asking for a release and cross indemnity for any potential claims and liabilities.
Jan 10, 2013 at 11:22 AM
Reader Comments (8)
Why Can't Obama Bring Wall Street to Justice?
http://www.thedailybeast.com/newsweek/2012/05/06/why-can-t-obama-bring-wall-street-to-justice.html
Flashback
Obama Received a $101,332 Bonus from AIG
http://www.examiner.com/article/obama-received-a-101-332-bonus-from-aig
Obama's AIG Outrage: All Talk, No Action
http://www.time.com/time/politics/article/0,8599,1885668,00.html
Super! Now AIG shareholders can sue management for not suing the government for not allowing capitalism to do its job.
Moral hazard: the gift that keeps on giving.
http://www.reuters.com/article/2013/01/09/us-aig-lawsuit-government-idUSBRE9080S720130109
http://www.huffingtonpost.com/2009/03/19/obama-envoy-richard-holbr_n_177161.html
Sen. Dodd’s Wife Was AIG Director
http://www.judicialwatch.org/blog/2009/03/sen-dodd-s-wife-was-aig-director/
ever wonder why 2000 yrs of expulsions have been put in place?
http://www.reuters.com/article/2013/01/12/us-aig-newyorkfed-bankofamerica-maidenla-idUSBRE90B02420130112
[snip]
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.