What do you folks think about calls to renegotiate the terms of AIG's bailout loan from Uncle Sam? AIG's former head honcho, Hank Greenberg, warns that the current deal could spell doom for AIG, which wouldn't serve anyone's purposes. The Wall Street Journal seconded that motion in an editorial today, and I tend to agree.
Mr. Greenberg, who has suggested AIG would have been better off declaring bankruptcy rather than accepting the loan terms laid down by the Fed for its $85 billion bailout (which was followed by a second line of credit of $37.8 billion), sent a letter to the company's new CEO, Edward Liddy, attaching a plan to save AIG. (Click here for the full article.)
As reported by our own Dan Hays, Mr. Greenberg–making his living these days as chairman and CEO of C.V. Starr and Company, after being driven out of AIG following the finite re accounting scandal–complained that the initial loan carried an onerous actual interest rate in excess of 14 percent, and on top of that, the government receives 79.9 percent of the ownership of AIG.
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