The Federal Reserve Board threw a life preserver to keep American International Group Inc. from drowning in subprime-related obligations last week, as the U.S. government took a 79.9 percent stake in the troubled firm in exchange for up to $85 billion in emergency financing. The 11th-hour deal meant AIG did not have to seek bankruptcy court protection, as had been cited as the worst-case scenario by a Fed official.
Meanwhile, Edward Liddy, the former chief executive officer for Allstate Corp., was tapped to run AIG's day-to-day operations as its new CEO.
Mr. Liddy was CEO of Northbrook, Ill.-based Allstate from 1999 until 2005. He replaces Robert Willumstad, still AIG's chairman, who took on the added CEO role in June when Martin Sullivan--who had replaced Maurice Greenberg--stepped down.
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