One of the more infamous bailouts from the 2008 crash was the rescue of AIG, which saw its reputation severely tarnished during the crisis. With AIG now back on its feet, the insurance giant is spending a fair amount of money on an advertising campaign, running ads like these thanking America for saving the multi-billion dollar company.
There is, however, a little detail that the ad campaign doesn't mention: AIG is considering a lawsuit against the same United States government that saved it from collapse.
Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders.
The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation."
There are financial experts who can speak with more authority than I about the merits of the case. But at least on the surface, if AIG is concerned about its standing with the public, suing the United States because the insurer isn't satisfied with the way in which the government rescued the company probably isn't a great strategy.
Indeed, had it not been for the bailout AIG now sees as overly onerous, there wouldn't be an AIG to file a lawsuit at all.
Readers more familiar with finance litigation are invited to weigh in below, but from a distance, it appears AIG is pushing its luck. As Matt Yglesias added, "Common sense says that absent the bailout, AIG shareholders would have nothing at all today so they don't get to complain that they end up with less than they might have gotten under some alternate bailout. But obviously the law doesn't always follow common sense so I can't entirely exclude the possibility that there's a real case here."
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They have NO GROUNDS ... without the "bailout", they would have lost EVERYTHING.... any judge or jury should see, Getting back to being a stable company, they have benefited and will continue to benefit, because of the bailout ..... There is No damages, what they are making since the bailout is ALL gains that would NOT have happen without the bailout .... they're idiots!!!The math shows ..... Nothing is much better than their gains NOW!!
Opps .... there are NO damages.... and What their gains are NOW are much better than nothing!!
How about a nice class action lawsuit against AIG on behalf of those who ended up losing their jobs--not to mention their homes--because of the irresponsibility of these clowns?
I'm not talking about the crazy housing speculators. I'm referring to those who had played by the rules and had acted prudently before the crash.
Love to see AIG try to defend THAT lawsuit.
Eminent domain? Seriously? Eminent domain? I'd have to contend that just compensation was created by saving AIG's arse. See? Here is another case that justifies letting any and all companies that are effectually bankrupt to just drop out of existence. Just as you cannot legislate morality you also cannot buy morality for a morally bankrupt entity.
Because the government chose not to prosecute any AIG executives for the wrongdoing that bankrupted their company the shareholders now find it convenient to blame and bring lawsuit against the government. As long as the money talks the "bullpucky" will walk, and the greed will live on.
If the lawsuite doesn't work out AIG could go to plan B? Sue the Government for negligence for NOT letting them go under?
"...deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation."
How convenient to forget that those same shareholders would be BROKE if not for the use of public funds to save their sorry private butts.
Big problem with that is the Bailout was from Republicans. So Republicans suing Republicans seems about what happens now. that and skewer their PR. I hear SC has to pay some legal fees for winning their voter ID case. ahem the Taxpayers do. X_X The taxpayers who don't want the Voter ID in the first place..
A lawsuit?
Sounds to me like a dandy opportunity to get those guys on the stand and testifying under oath.
That's why there's no chance this suit will go forward. The U. S. Government is full of lawyers--not to mention more than a few politicians--who are salivating over the thought of getting testimony from AIG executives and those great minds in the company's Financial Products Division who caused much of the 2008 crash.
The show would be well worth the costs of defending against this legal action.
Can I be on the jury? Please, please.
You know how there's a War Crimes Tribunal? Why can't there be a Corporate Crimes Tribunal?
I'd sure love to inspect AIG's books to see how that $205 billion was "paid back."
That's paying back $50 billion a year for the past four years, beginning at a time when AIG was flat on its back. There's no way this company has been that profitable over that period.
Also, where did they "pay back" the trillions in AIG derivatives-related losses that we covered through payments to Goldman Sachs, Deutschebank, and heaven knows how many others that were on the other side of the AIG Financial Products Division's lunacy?
AIG? The financial Gong Show? Is Fred Thompson behind this lawsuit?
Let's see.... The Bush2 Regime's "bail out" of the fabulously wealthy has cost each American citizen about $33,500 each. Now AIG wants *MORE* of our money?!
From Wikepedia: The Scorpion and the Frog is a fable about a scorpion asking a frog to carry him across a river. The frog is afraid of being stung during the trip, but the scorpion argues that if it stung the frog, the frog would sink and the scorpion would drown. The frog agrees and begins carrying the scorpion, but midway across the river the scorpion does indeed sting the frog, dooming them both. When asked why, the scorpion explains that this is simply its nature. The fable is used to illustrate the view that the behaviour of some creatures, or of some people, is irrepressible, no matter how they are treated and no matter what the consequences.
We need to consider, each and every American if you want to leave this company and look for another one. If you have an acct. with AIG take your money out, close your accts. and run. The shareholders toke a chance on AIG and trusted them and they lost. That happens to investments. Not always do you get rich off them. SORRY YOU LOST.
The shareholders lawsuit is being headed by Hank Greenburg, the former Head of AIG who was removed for shady dealing before the crisis. His net worth was reduced from $1 billion+ to around $100 million by the crash of AIG stock caused by policies he put into place. This greedy POS is suing the US government to get taxpayers cough up a bunch of money, because, after all, how can one live on a measly 100mill?
Iceland bailed out the people, fired the government (the equivalent of Congress) and put the bankers in prison. What are you waiting for?
Exactly!
Hmmm, an EXCELLENT time to consider sending these crooks to the PEN! To prison where they belonged in the first place.
G R E E D
Just plain, G R E E D !!!
AIG shouldn't have begged for the money and Washington should not have gave it to them.Let mismanaged businesses go away or file bankruptcy.Crony capitalism is corporate welfare period.Then senator Obama voted for it as did McCain. Its wrong and irresponsible.
Still can't say "President Bush", can you?
President Bush President Bush President Bush. Oh good he's not here! So he isn't like Beetlejuice after all!
Rachel, I'm sure Tom Brokaw still has an office in your building. Could you go ask him about one of the people he spotlighted in his book, "The Greatest Generation"? Specifically, can you ask him about Maurice Greenberg... yes THAT Maurice Greenberg–the AIG guy. The guy that managed a company that was a main player in the collapse of the us economy. I guess Tom and him are good buddies. Or maybe, just maybe, Tom may reconsider and edit the next edition of his book.
Personally, I'd have said this was just completely ridiculous -- until I got to the part about "the funneling of billions to the insurer's Wall Street clients", at which point I'd posit two things: that THIS probably DOES warrant a MUCH closer look, a LOT more daylight and exposure -- and that the CHANCE of that look, daylight and exposure probably ENSURES it will be sidetracked, derailed, and squelched. It will be informative to at least watch details of by-whom-and-how this evolution gets handled.
On the other hand, my interest in the AIG situation ranks right down there with wondering why the swollen belly of a week-dead zebra might be twitching with movement -- in both cases, my imagination fills in the very-similar details all too clearly, and the low probability of any JUSTICE leaves me with no real desire to get even remotely entangled, unproductively, with AIG's destiny and karma.