More on AGI's chutzpah


From the NY Times:

A.I.G. is weighing whether to join the lawsuit, filed by Mr. Greenberg’s investment firm, Starr International Company. A.I.G. most likely will not end up joining forces with Mr. Greenberg, but, as a duty to shareholders, it has to at least give his suit a thorough assessment.

One of Starr International’s major arguments is that A.I.G.’s bailout terms were far tougher than those granted to other large financial firms. But A.I.G.’s cash needs and internal failings were in many ways far more serious than those of other institutions. In fact, the company was in such dire straits after the rescue that the government chose to loosen the terms of its aid.

The concessions were considerable.

In early 2009, the Federal Reserve cut the interest rate on a big loan to A.I.G. At the time, the company said that would save it $1 billion a year in interest.

The Treasury Department made another favorable change. It exchanged $40 billion of preferred shares for new ones that effectively paid no cash dividends to taxpayers. If it had paid the originally agreed 10 percent dividend on all these and other preferred shares, the insurer would have paid roughly $20 billion from the beginning of 2009 to the end 2012.
Instead, the preferred shares were converted into common stock, which the government later sold. The Treasury Department made a $5 billion return on its investments.

The government could have made more, if it had chosen to.

Greenberg is the former chairman of the company.

Story.

Duty to stockholders? How about, duty to the country? And where's the humility about contributing to a financial disaster whose effects we're all still feeling?