NPR's Marketplace covered this story tonight and provide a bit of context:
"[Henry Hu, a law professor at the University of Texas and a former SEC regulator] says AIG’s board has an obligation to consider the lawsuit because of shareholder interests, “but they should also consider the costs of this in terms of their relationship with the regulators.”
Don’t forget, AIG is the company that just started running ads saying -- no joke -- “Thank you America.”
A spokesman for the New York Fed said the allegations have no merit because bankruptcy was AIG’s only alternative. That would have wiped out shareholders entirely.
[Phil Angelides, who chaired the Financial Crisis Inquiry Commission] thinks the board shouldn’t consider this lawsuit for more than a minute.
...
AIG issued a written statement today saying it will follow the law and consider the suit. In earlier email to Marketplace, an AIG spokesman declined to comment. Though he did say Thank You."
Source: http://www.marketplace.org/topics/business/aig-thanks-bailou...
This is approximately as reasonable.
But given lawyers and the unlimited ability for people to just file lawsuits, there's probably a legal definition that entails at the least a few hours "consideration" of such proposals.
/cynic
If they owned 51% of shares? Well, er...
Who the fuck is this guy? Patrick Bateman?
That romantic vision of how the market works is very different from what happens in reality. There were cases where individuals were responsible for the havoc, most are in jail. But, in general, banks were stupid and led by a government desperate for GDP numbers and campaign money.
There is a culprit for the re-insurance and debt re-packaging mess: The american people. Freedom without social responsibility is not freedom, is something close to anarchy.
Less than a week after the federal government committed $85 billion to bail out AIG, executives of the giant AIG insurance company headed for a week-long retreat at a luxury resort and spa, the St. Regis Resort in Monarch Beach, California, Congressional investigators revealed today.
"Rooms at this resort can cost over $1,000 a night," Congressman Henry Waxman (D-CA) said this morning as his committee continued its investigation of Wall Street and its CEOs.
AIG documents obtained by Waxman's investigators show the company paid more than $440,000 for the retreat, including nearly $200,000 for rooms, $150,000 for meals and $23,000 in spa charges
Consider this: you're having a conference for multimillionaire corporate executives and top performers. People who usually work in different locations are coming in to meet together and perhaps bring their spouses for some hobnobbing, strategy talks, and teambuilding exercises. Where do you think they're going to stay? The Motel 6? When you're paying someone a high six figure salary plus bonuses, is it really a scandal to pay $300 for a hotel room?
And by the way, if the rooms "can cost $1000 per night" and you rent out two hundred rooms for your event, if you ended up paying more than $300 per room, you should fire your meeting planner.
Yes, they could have "not accepted" that deal. But there are two sides to this.
Bottomline is, the government may have gotten the money back on TARP, but I think they gave the banks a lot more, and it was a net loss. I mean we didn't even know about the $7.7 trillion the Fed printed to loan to banks in both US and through out the world. Those loans were secret. How do we know they paid them back or not?
It's fortunate that even with the short attention spans of today, the word "AIG" is now synonymous with "fuck up".
They should have waited another year or two.
We like to think of corporate entities as these monolithic self-governing decision-making entities, but most likely it's some top executive's knee-jerk reaction to not meeting the 2012 goals that his bonus depended on.
http://en.wikipedia.org/wiki/Sovereign_immunity_in_the_Unite...
Maybe a lawyer will stroll by and give you a real answer.
SECOND REACTION: hmm, so they're only 'considering' it because they have to. Fair enough I guess, crazy shareholders must be a nightmare.
