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I think that this headline a bit misleading. AIG is legally required to consider it because their former CEO is a huge shareholder and is demanding that they co
by kevinconroy 14y ago
I think that this headline a bit misleading. AIG is legally required to consider it because their former CEO is a huge shareholder and is demanding that they consider it. Since it has potential shareholder benefit they have to hear him out.
NPR's Marketplace covered this story tonight and provide a bit of context:
"[Henry Hu, a law professor at the University of Texas and a former SEC regulator] says AIG’s board has an obligation to consider the lawsuit because of shareholder interests, “but they should also consider the costs of this in terms of their relationship with the regulators.”
Don’t forget, AIG is the company that just started running ads saying -- no joke -- “Thank you America.”
A spokesman for the New York Fed said the allegations have no merit because bankruptcy was AIG’s only alternative. That would have wiped out shareholders entirely.
[Phil Angelides, who chaired the Financial Crisis Inquiry Commission] thinks the board shouldn’t consider this lawsuit for more than a minute.
...
AIG issued a written statement today saying it will follow the law and consider the suit. In earlier email to Marketplace, an AIG spokesman declined to comment. Though he did say Thank You."
Source: http://www.marketplace.org/topics/business/aig-thanks-bailout-see-you-court http://www.marketplace.org/topics/business/aig-thanks-bailou...
- jbooth 14y agoIf a large shareholder insisted they build a moon base, would they be required to consider that, too? This is approximately as reasonable.
- untog 14y agoIf a large shareholder insisted that build a moon base, would they be required to consider that, too? If they owned 51% of shares? Well, er...
- deleted 14y ago[deleted]
- mikeash 14y agoI think would. Note that considering it isn't the same as carrying it out. Presumably they'd consider the moon base briefly, notice that the cost/benefit ratio is enormous, and decline.
- deleted 14y ago[deleted]
- delinka 14y agoConsider it, yes. However, how does one define 'consider'? The board looks around at one another, one or two offer negative points against the suggestion, someone calls for a vote and they decide not to do it. 60 seconds from the time the suggestion comes up, it's voted down. I'd say that they "considered" it. But given lawyers and the unlimited ability for people to just file lawsuits, there's probably a legal definition that entails at the least a few hours "consideration" of such proposals. /cynic
- cmelbye 14y agoWell, yeah.
- pmorici 14y agoVery misleading it's really Hank Greenberg the Ex-CEO of AIG who ran AIG into that mess in the first place that initiated the lawsuit.
- jacobwcarlson 14y agoYours is actually a very misleading comment since Greenberg stepped down as CEO in 2005.
- hga 14y agoTo be even more specific, was forced out of the company at the beginning of 2005 in a totally abusive prosecution by NY AG Eliot Spitzer, who the last time I checked completely failed to get a single big white collar crime conviction. I find it difficult to believe there's no connection between the government's trashing of AIG's top level management, including their required vetting of the new head, and the failures in risk management that followed.
- pmorici 14y agoWere AIG's troubles not well underway by 2005 even if they weren't public knowledge yet? Also if memory serves he was forced out over allegations of illegality in a shady deal AIG made to secretly borrow money from a subsidiary of Berkshire Hathaway to make it look like AIG was in a stronger financial position than they actually were. Also Wikipedia says he was forced out by the AIG board.
- antihero 14y ago> because their former CEO is a huge shareholder and is demanding that they consider it. Who the fuck is this guy? Patrick Bateman?