The NYTimes reports that according to court records, AIG is considering joining a $25 billion lawsuit against the US government because its shareholders lost a lot of money in the aftermath of the crisis.
While it’s true that the shareholders lost money, what’s galling is that AIG (and the shareholders) would have been in financial ruin without the aid of US taxpayers. Indeed, AIG would be suing the US government after the government gave AIG a $182 billion bailout (a portion of which went to executive bonuses) plus billions of dollars in tax breaks.
An excerpt from the NYTimes piece:
Should Mr. Greenberg snare a major settlement without A.I.G., the company could face additional lawsuits from other shareholders. Suing the government would not only placate the 87-year-old former chief, but would put A.I.G. in line for a potential payout.
Yet such a move would almost certainly be widely seen as an audacious display of ingratitude. The action would also threaten to inflame tensions in Washington, where the company has become a byword for excessive risk-taking on Wall Street.
Some government officials are already upset with the company for even seriously entertaining the lawsuit, people briefed on the matter said. The people, who spoke on the condition of anonymity, noted that without the bailout, A.I.G. shareholders would have fared far worse in bankruptcy.
So, if there’s a firm out there looking to generate public outrage, this is how they could do it.
1. Demand a $182 billion bailout
2. Use the bailout for bonuses + paying off Wall Street banks
3. Hold a meeting to consider suing the government because your shareholders didn’t get a large enough cut of the money
flickr photo: jdiggans