Alternate subheadline: Comedians, bloggers hardest hit. Come on, you know this would have been a cynic’s goldmine, right? Alas, AIG has come to its senses:
The board of AIG decided Wednesday not to join a shareholder lawsuit against taxpayers which challenges the terms of the bailout that saved the insurer from bankruptcy in 2008.
The board did not detail the reasons for the decision, saying it will make that clear in court filings in the coming weeks. But when reports surfaced Tuesday that it was even considering joining the suit, it sparked widespread outrage against the company.
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.
That’s why the board also stipulated that no shareholder could join the lawsuit in AIG’s name, either:
AIG said that in addition to not joining the suit, it also will not permit the shareholders to pursue the claims against the government in AIG’s name.
Beyond the bad publicity and reek of ingratitude, CNN Money writes that AIG probably reached the conclusion that they couldn’t win the lawsuit, either. After all, while AIG did get draconian terms from Uncle Sam, the board had the option to reject the deal and proceed into normal bankruptcy. They voted to accept the deal offered. Perhaps the shareholders might have a case against the AIG board for that decision, but it’s going to be tough to convince a judge that the government had the legal responsibility to take it easy on a company that went looking for a bailout, and then took it.
Many years ago, I read through a Ripley’s Believe It Or Not book, which included a case in the West where a man had been rescued by his neighbor from being lynched by his own rope. The rescued man sued the neighbor for damaging the rope, Ripley’s claimed, and the ingratitude was staggering. I’d like to think he lost the case, and I’d like to think the same will happen with this shareholder lawsuit, too.