Edward Liddy, before he stepped down as American International Group's embattled chair and chief executive last week, wrote company employees to tell them that despite liquidations to repay government loans, the company is undergoing a rebirth, not a breakup.

The former head of Allstate, who became AIG's CEO last fall when the government assumed a 79.9 percent interest in the financially strapped firm, said in an Aug. 7 letter that he was going back into retirement with “$1, a few bruises and a feeling of hard-earned accomplishment.”

Mr. Liddy's bruises were an apparent reference to the battering he took from congressional critics and New York Attorney General Andrew Cuomo when the firm, which has taken billions in government loans, gave out bonuses to executives–including those with AIG's Financial Products unit, which had nearly forced the company into bankruptcy.

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