AIG Is Thinking About Suing the Government... for Bailing It Out
14 replies, posted
[img]http://i.imgur.com/QbL0W.jpg[/img]
[quote]It's been almost five years since AIG's stock dropped 60 percent in a day leaving the company doomed to failure, when Uncle Sam swooped in with $182 billion to rescue it. But AIG must have a short memory, because on Monday night news emerged that the insurance company is actually thinking about suing the U.S. government over the bailout that saved it. The board will discuss the idea with shareholders at a meeting on Wednesday.
It's not so much that AIG's mad the government bailed them out. (They wouldn't be around to be mad if it hadn't.) They just wish they'd done it a little bit differently. "The lawsuit does not argue that government help was not needed," The New York Times reports. "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.'" Does that kind of bad attitude count as "looking the gift horse in the mouth" or "biting the hand that feeds you?" Or both?
The timing of AIG's potential lawsuit is a little bit curious. The company just finished paying the government back about a month ago, when the Treasury Department announced the sale of its last batch of AIG shares -- at a profit nonetheless. Then a week ago, AIG launched a rah-rah ad campaign with the tagline "Thank You America" to show just how much it appreciates taxpayers saving its butt.
But that's not the message that suing the government for putting up the cash sends, is it? A professor of law and finance at the University of San Diego told The Times, "On the one hand, from a corporate governance perspective, it appears they're being extra cautious and careful. On the other hand, it's a slap in the face to the taxpayer and the government."[/quote]
[url=http://finance.yahoo.com/news/aig-thinking-suing-government-bailing-041150357--finance.html]SOURCE[/url]
Oh lord. They're arguing corporate personhood and trying to use the fifth amendment.
[QUOTE]"The lawsuit does not argue that government help was not needed," The New York Times reports. "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 [B]and the funneling of billions to the insurer's Wall Street clients[/B][/QUOTE]
Because I know people won't read past the first paragrapgh
Assholes. If you're bad enough at being a business, you shouldn't be in business.
And this is why I hate the idea of Corporate Personhood, Corporations should not be treated as a single person, they should be treated as a group of people. Been having this stupid fucking loophole since the early 20th century
So let me get this straight, the U.S. government legally purchases a 92 percent stake in a dying company. Obviously, they can't just seize the shares, meaning they likely paid current market value for them(which was next to nothing at the time). Company recovers due to that massive influx of cash. US government is repaid and sells their stocks, making a tidy profit off their investment.
If that's the case, what's the problem? Boohoo, the U.S. government did the same type of thing that regular investors do.
the government owns 92% of the company
and they said they were discussing this lawsuit with shareholders.
i don't understand how this works
[QUOTE=meppers;39149892]the governmental owns 92% of the company
and they said they were discussing this lawsuit with shareholders.
i don't understand how this works[/QUOTE]
[quote]The company just finished paying the government back about a month ago, when the Treasury Department announced the sale of its last batch of AIG shares -- at a profit nonetheless. [/quote]
"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 [B]violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation[/B].'"
Bullshit.
This was not a taking. The government only needs to compensate under the fifth when there's an actual taking. The Court has been pretty reliable in saying that if you have property that makes money before the government fucks with you, and you have property that makes money after the government fuck with you, and it's the same property, then the government took nothing and owes you nothing.
Obviously this is a bit different, would make an interesting case, but I don't think that this is a violation of the Fifth by the Court's standards. That and the fact that AIG, being a corporation, did not lose property per se, but lost [I]some ownership[/I]. Whether we consider that the government took AIG's property by taking a part of the company, or whether we consider that they took merely shares of a public company, it does not matter, since the company is public. Public corporation, can be regulated by the government as it sees fit, so long as potential for capital gains has not been eliminated. The shares are still share in the company, nothing was really taken.
(Of note:
[url]http://en.wikipedia.org/wiki/Penn_Central_Transportation_Co._v._New_York_City[/url], [url]http://en.wikipedia.org/wiki/Kelo_v._City_of_New_London[/url])
How can they argue that the shares were taken without due compensation when the government paid market price for them?
Isn't that, like, the definition of compensation?
pretty sure the shareholders tried this exact lawsuit recently and it was dismissed because aig voluntarily agreed to the conditions of the bailout
Not only did the government pay market price for them, AIG asked for it
AIG can fuck right off because this is going to go no where for them
In my country, there's a saying: the one you hadn't left for dead won't let you live.
[QUOTE=Paul McCartney;39149292]Oh lord. They're arguing corporate personhood and trying to use the fifth amendment.[/QUOTE]
Actually not precisely. They're basically attacking the bail out from the position of their shareholders and loanholders who were essentially lock out in a lot of ways.
There's basically two ways this can be aproached - either those people band together and file the lawsuit themselves, or they'll do it via the company. That said I do believe a similar lawsuit was already dismissed once at least.
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