They really don't care about that. When they were very close to bankruptcy, they would've done whatever the government would've asked them to do. Soon after the bailouts, they weren't even going to meet with Obama to talk about further banking regulations. I'm talking about the top banks in general.
Rescued by a Bailout, A.I.G. May Sue Its Savior
11–20 of 99 posts
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#12This really makes my blood boil, but I'm trying to remain impartial while reading. The highlight of the article: > Judge Paul A. Engelmayer wrote that while Starr’s complaint “paints a portrait of government treachery worthy of an Oliver Stone movie,” the company “voluntarily accepted the hard terms offered by the one and only rescuer that stood between it and imminent bankruptcy.” Sure, the terms might have seemed "…
I agree with the emotion but I can also see the argument that the agreement was made under duress. If you are about to die and the only person who could save you, offers to do so, but asks you to agree to something reprehensible in exchange for saving you, what do you do? At the risk of creating a strawman (the goal is illustration not substitution) let us construct a scenario, you're hanging by a rope which is break…
Actually, it's more like a guy who just conned your family out of their life savings is hanging by a rope, which is breaking. You don't feel inclined to save them, but unfortunately, they're hanging over a crowd of innocent bystanders. You agree to save them, mostly so that the others are not injured. While you do, you make them agree to give back all of the money they stole under shitty terms. They do so by screwing over the guys who helped them pull the con job, who are now coming to you asking for their share of the money they stole from your family.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#13This really makes my blood boil, but I'm trying to remain impartial while reading. The highlight of the article: > Judge Paul A. Engelmayer wrote that while Starr’s complaint “paints a portrait of government treachery worthy of an Oliver Stone movie,” the company “voluntarily accepted the hard terms offered by the one and only rescuer that stood between it and imminent bankruptcy.” Sure, the terms might have seemed "…
I agree with the emotion but I can also see the argument that the agreement was made under duress. If you are about to die and the only person who could save you, offers to do so, but asks you to agree to something reprehensible in exchange for saving you, what do you do? At the risk of creating a strawman (the goal is illustration not substitution) let us construct a scenario, you're hanging by a rope which is break…
Except that bankruptcy (particularly corporate bankruptcy) is hardly as permanent as death. And no-one making decisions at AIG was personally on the hook for remotely that level of responsibility.
Conflating their position with calamitous death seems borderline disingenuous. You're soliciting emotional reactions to an unforeseeable emergency. But AIG was in a situation that years of rational business decisions put in the cards. They not only should have known it could happen, but they'd also know that their gains from having done it far outweighed the personal potential losses.
Which is almost certainly why the gambles were made in the first place and puts the lie to any analogy to human desperation in a split-second survival scenario.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#14Earlier quoted context omitted.
I agree with the emotion but I can also see the argument that the agreement was made under duress. If you are about to die and the only person who could save you, offers to do so, but asks you to agree to something reprehensible in exchange for saving you, what do you do? At the risk of creating a strawman (the goal is illustration not substitution) let us construct a scenario, you're hanging by a rope which is break…
Actually, it's more like a guy who just conned your family out of their life savings is hanging by a rope, which is breaking. You don't feel inclined to save them, but unfortunately, they're hanging over a crowd of innocent bystanders. You agree to save them, mostly so that the others are not injured. While you do, you make them agree to give back all of the money they stole under shitty terms. They do so by screwing…
I like it! Ideally that will come out in court (should it go to trial, although I consider that unlikely). Someone should make a Matrix spoof where the kid at the Oracle's house says,
Boy: Do not try and recover the money. That's impossible. Instead only try to realize the truth.
Neo: What truth?
Boy: There is no money.
Neo: There is no money?
Boy: Then you'll see that it is not the banks that are broke, it is only yourself.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#15From the article: "It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.” From a di…
If AIG would have went bankrupt, shareholders would have got nothing. After all the liabilities paid out(to the wall street clients who had credit default swap contracts), there would have been nothing left. US put 170 billion into a company worth $2 billion(market cap at the time) for 92% stake. There is no legitimacy to the claim.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#16From the article:
> The choice is not a simple one for the insurer. Its board members, most of whom joined after the bailout, owe a duty to shareholders to consider the lawsuit. If the board does not give careful consideration to the case, Mr. Greenberg could challenge its decision to abstain.
Which is reiterated by the expert they interviewed:
> “On the one hand, from a corporate governance perspective, it appears they’re being extra cautious and careful,” said Frank Partnoy, a former banker who is now a professor of law and finance at the University of San Diego School of Law. “On the other hand, it’s a slap in the face to the taxpayer and the government.”
It may seem reprehensible, but they are obligated by law as a public company with obligations to its shareholders to at least consider it. Whether they join or not, and under what merits, should be how we judge them.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#17Earlier quoted context omitted.
I agree with the emotion but I can also see the argument that the agreement was made under duress. If you are about to die and the only person who could save you, offers to do so, but asks you to agree to something reprehensible in exchange for saving you, what do you do? At the risk of creating a strawman (the goal is illustration not substitution) let us construct a scenario, you're hanging by a rope which is break…
Except that bankruptcy (particularly corporate bankruptcy) is hardly as permanent as death. And no-one making decisions at AIG was personally on the hook for remotely that level of responsibility. Conflating their position with calamitous death seems borderline disingenuous. You're soliciting emotional reactions to an unforeseeable emergency. But AIG was in a situation that years of rational business decisions put in…
If you review the situation with AIG, the only available bankruptcy option available to AIG was Chapter 7, aka liquidation. There was no scenario without the government stepping in that they could have used Chapter 11 to re-organize.
In this case, a corporate liquidation is exactly like death, the assets are divided up amongst the creditors and the company ceases to exist.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#18I cannot express how disgusted I will be should AIG join the suit. The notion that AIG was somehow wronged by the government in this case is beneath contempt.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#19Earlier quoted context omitted.
Except that bankruptcy (particularly corporate bankruptcy) is hardly as permanent as death. And no-one making decisions at AIG was personally on the hook for remotely that level of responsibility. Conflating their position with calamitous death seems borderline disingenuous. You're soliciting emotional reactions to an unforeseeable emergency. But AIG was in a situation that years of rational business decisions put in…
If you review the situation with AIG, the only available bankruptcy option available to AIG was Chapter 7, aka liquidation. There was no scenario without the government stepping in that they could have used Chapter 11 to re-organize. In this case, a corporate liquidation is exactly like death, the assets are divided up amongst the creditors and the company ceases to exist.
Nothing that can happen to a corporation is like human death for the humans making the decision, nor for the humans who stand to lose money for having invested in that company, nor for the humans who are employees at the corporation.
It just isn't the same. Not remotely. There's no parallel.
AIG, via its decision-makers, took the bet that the bailout would work out for them for the same reason they took the bets that put them into that position and the same reason they're taking the bet that it's worth suing the federal government: a sober analysis of risk/reward suggested it was the best business move.
No-one acted out of desperation. No-one was going to be hung for their misdeeds. No-one was jumping out a window for grief or committing seppuku for shame.
Re: Rescued by a Bailout, A.I.G. May Sue Its Savior
#20With government contract work here in New Zealand I have noticed a willingness to call in the lawyers very early. If the contract were with a private enterprise there is no way a contract would get renewed, however the government is happy to deal with people even after after they have been sued recently. This may not we a world wide phenomenon.
I have seen it noted that common law countries in general tend to resort to lawyers early and often. Indeed when comparing major construction in different countries, having a common law legal system is a risk factor for having much higher costs.