They were intimidated by threats of retaliation from the government. It’s chilling.

The AIG “bailout” was in essence a massive confiscation of value by the federal government without due process.

Gee, what might have been the reasons for AIG to take a pass? How about the loss of all credibility in the marketplace, for one thing? Recall that GM and Chrysler initially took a beating in public relations just for having accepted the bailouts; some people still swear they won’t buy from “Government Motors” any longer, or Chrysler Fiat either. Imagine what the market blowback would have been from joining a lawsuit insisting that taxpayers didn’t save their bacon nicely enough.

Okay fine, it hurt their reputation with consumers, but have you forgotten that GM bondholders and Chrysler dealers were royally screwed by BO?!

Sure, under normal circumstances with an administration free of corruption, it would be laughable for someone who got a bailout to sue the feds, but this is the BO administration we’re talking about. I don’t recall the circumstances of AIG’s collapse but considering the past thuggery of the Obama administration regarding bailouts, I am inclined to sympathize with them. If I have to choose between Hank Greenberg and Barack Obama and his team of Chicago gangsters, I’m going with Greenberg any day. BO screwed GM senior bondholders via his “managed bankruptcy” and brass-knuckled companies into taking bailouts they didn’t want. It’s likely AIG was going to be screwed no matter which option they chose -if they even had a choice. Team BO (and his union pals, but I digress) do extortion very well.

Thanks for taking a minute to pull something up, by the way. I didn’t mean to put you out.

Axe on January 10, 2013 at 9:59 AM

No worries. I did manage to sneak behind the WSJ firewall again and will throw in a couple of excerpts from their editorial below. The editorial argues that every “taxpayer and shareholder should be rooting for this case to go to trial” to determine under what circumstances the government has the right to take over a private business.

Greenberg’s company, Starr International, a major shareholder in AIG,

“cites the Fifth Amendment, which holds that private property shall not “be taken for public use, without just compensation.” The original rescue loans from the government required AIG to pay a 14.5% interest rate and were fully secured by AIG assets. So when the government also demanded control of 79.9% of AIG’s equity, where was the compensation?

Greenberg has consistently argued that the company would have been better off in Chapter 11. He argues that since AIG’s assets were greater than its liabilities, there was an opportunity to preserve some shareholder value. To be sure this is a tough argument to make given how difficult it would be to maintain the reputation of a financial firm operating in bankruptcy. But let him make it.

The company has since come under withering criticism for considering joining the $25 billion lawsuit.

http://www.foxbusiness.com/industries/2013/01/09/theres-more-to-greenbergs-aig-government-lawsuit/#ixzz2HaL4JbAP

And the jokes and bottles would still fly.

Drained Brain on January 10, 2013 at 9:51 AM

It’s just . . . regardless of the argument, if at the bottom of the complaint is cash, it sort of loops back to righteous indignation. :) No getting around it. That’s what I was wondering about. (Even if the argument is nicely conservative and sympathetic, etc.)

Thanks for taking a minute to pull something up, by the way. I didn’t mean to put you out.

Charlie Rose Talks to AIG Chief Robert Benmosche

Benmosche is the current CEO, who took over from Hank Greenberg, the latter who is behind the law suit. You can read that Benmosche’s attitude is only one of deep gratitude.

Seeking what? (Can’t read it.)

Axe on January 10, 2013 at 9:39 AM

I’m not currently a paid subscriber so I can’t open it again. I did find – and it takes a lot of searching – one other analysis on Fox Business here that explains the “other side” to some extent. As soon as I read that Dems have put great pressure on the AIG Board I’m suspicious.

[excerpts]

Democrat members of Congress including Peter Welch and Michael Capuano are pressuring AIG’s board, warning it not to even think about joining the suit.

——

The Starr International lawsuit also brings up once again the public’s right to know what was done with government funds and AIG’s assets. It’s about the public’s right to know why suddenly Wall Street firms like Goldman were too big to fail. It’s about the government’s sudden decision in declaring there was systemic risk to the U.S. economy in not fully remunerating 100% Goldman, Merrill Lynch and foreign banks in their rotten derivatives deals.

And the lawsuit raises again the public’s right to know how Goldman and other Wall Street banks, as well as the French government, were pressuring the U.S. government into getting 100% of their money back, despite the fact that rotten subprime deals sat at the heart of these trades, caveat emptor Goldman, Societe Generale and Calyon.

The former CEO argues that the government should have let AIG proceed into bankruptcy, because it had assets.

Drained Brain on January 10, 2013 at 9:03 AM

Seeking what? (Can’t read it.)

The suit is about the extent of the right of government to step in and take over a functioning company.

The former CEO argues that the government should have let AIG proceed into bankruptcy, because it had assets.

Big of ‘em.

Bobbi on January 10, 2013 at 8:06 AM

Too big to fail.

Come on, you know this would have been a cynic’s goldmine, right?

I think there might have been violence. Not from ours, but theirs, over there in the swamp. The hippies would have lost it, and it’s hard to properly police things when pretty much everyone (cops included) wouldn’t mind if this and that caught on fire, even if the good guys would have never thrown the bottle.

This is basically a walking insult to injury cliche. Nothing like an injured and insulted anarchist at an Occupy AIG rally.