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AIG sues Maiden Lane II, asking a judge to declare the insurer did not transfer "litigation...

AIG sues Maiden Lane II, asking a judge to declare the insurer did not transfer "litigation claims" to the vehicle when it sold it billions in MBS to it during the financial crisis. At issue: Like everybody else, AIG has sued Bank of America (BAC) to recoup losses on bad mortgage paper. The FRBNY - which already got its own settlement from BofA - is of the opinion AIG lost its right to sue when it sold the securities to Maiden Lane.
Comments (23)
  • So AIG wants its cake and eat it too? Just be glad you got a sweet bailout, AIG.
    12 Jan 2013, 07:58 AM Reply Like
  • Big winner...attorneys...
    12 Jan 2013, 08:40 AM Reply Like
  • As is always the case. Its the same profession that dominates the halls of the U.S. Congress after all.
    12 Jan 2013, 09:31 AM Reply Like
  • I agree. I hope they lose and learn a lesson that the litigation gravy train has come to an end that their legal costs may exceed any hoped for settlement
    12 Jan 2013, 01:01 PM Reply Like
  • Big loser - Middle Class America and their kids and their kid's kids, et. al.
    12 Jan 2013, 09:03 AM Reply Like
  • It seems like nothing these big financials do is firmly understood and agreed to when the contracts are signed. Somewhere in there they have this clause: "For everything we left out, or didn't really mean it to begin with, see you in court."


    This was particularly severe in the run-up to the financial crisis, and in hastily made arrangements made during the crisis.


    They are a slippery bunch.
    12 Jan 2013, 09:03 AM Reply Like
  • AIG took on a terrible risk in the mortgage re-insurance business. How long would it take to convince a jury that this was a known risk, stipulated in the contracts signed and nothing like a CD with a guarantee. On a long shot if they are lucky - BAC and the others may settle for a few million if they feel that the legal costs on their side with a court case would exceed the savings if they were to successfully defend themselves. I would hope they would take it court, win against AIG and teach them and the others who continue to line up that the costs to litigate does not cover any hoped for benefit.
    12 Jan 2013, 01:11 PM Reply Like
  • Long Tail,
    AIG got the worst deal ...They paid the highest interest and were forced to pay 100% of the credit default swaps to the like of GS when the reciepients would have settled for less than half--It was all profit to them---they kept the MBS's and got the insurance...not a good deal for AIG
    12 Jan 2013, 10:10 AM Reply Like
  • That is true. GS owns the fed & govt. You should know that before dealing with GS. AIG was stupid. They deserved it.


    If they had covered up their true state, not taken the bail out but taken the corupt system down - they would have done America a great favor.
    12 Jan 2013, 10:27 AM Reply Like
  • pepsi1, maybe, but the US govt backstopped them with a multibillion$ guarantee. Maybe the US govt should have sue instead of AIG? Too much Monday morning quarterbacking with all these after the fact law suits, the financial companies should just be happy they survived and by looks of things AIG is doing ok (long AIG since mid 2011).
    12 Jan 2013, 10:18 AM Reply Like
  • Seems to me that a technical legal issue (what is or isn't in the contracts signed at the time) will decide this case (of which I know nothing about),and, all the commenters above also know nothing about the issue, and are simply blowing emotional smoke.
    12 Jan 2013, 10:41 AM Reply Like
  • Well Wyo,


    I guess the money the government uses to defend itself against AIG's lawsuit comes out of Obama's Stash, you think? or maybe more accurately, out of the pockets of taxpayers like you and me and everyone else on this board.


    AIG was dead in the water without a bailout, and now they're going to sue the government over the terms of saving them?


    Tell me which points you disagree with, and which points you consider "emotional smoke". I'm open to discussion. And I'll do my best to keep emotion out of it.


    Here is Forbes take on it:
    12 Jan 2013, 11:59 AM Reply Like
  • Didn't AIG decide against joining Hank Greenberg's lawsuit? Did AIG decide to initiate its own lawsuit regarding the matter?
    12 Jan 2013, 01:10 PM Reply Like
  • sling.....
    I have no opinion as to the merits of the case. Neither you nor I have seen the original legal documents, and are unqualified to interpret them even if we did.


    Additionally, AIG as a company decided not to become a plaintiff in the lawsuit. The suit is being brought by the ex chairman Hank Greenburg.


    Therefore, any comments for or against AIG in this matter is, as I said, "emotional smoke".
    12 Jan 2013, 02:15 PM Reply Like
  • wyo...
    I don't know how you arrived at the conclusion that I was interpreting the merits of the case other than I am making reference to a Forbes article, summing up the high points. You have made this point more than once that people on this thread, including me, are drawing conclusions unaided by any facts even in view of reference material cited. What's up with that?


    The Forbes article was dated Jan 8, and as of that date, AIG's board had not decided on their precise course of action, choosing to wait until they had more information to carefully navigate the legalities they made reference to. Maybe that has occurred and I am unaware of this subsequent decision. The article made mention of the Board being sensitive to public perception and so I can well understand their wanting to avoid a public backlash.


    Nothing of this has any bearing on emotion. Invoking the term "emotional response" does in fact go against the statement that you have no opinion, as that in itself is an opinion - a judgment based on insufficient grounds to produce certainty. How can you be certain that any of this is an "emotional response" considering you already stated you knew nothing of the case. At least I had a Forbes article which appears to be more than you produced. Am I wrong?


    I really don't want to pursue this any further and it would suit me fine to just let it drop. I typically enjoy your comments and if we don't stop this now, it could go on for a long time. However, if you accuse me of something, I am obligated to defend myself.
    12 Jan 2013, 03:21 PM Reply Like
  • sling.....


    Calm down and take a deep breath.


    As I stated above, the AIG B of D has decided not to get involved.


    I don't care what Forbes has to say about the issue. That also is "opinion".


    All I said was it is a case to be decided by nuances of a contract that neither of us are smart enough to understand even if we read what are probably numerous pages of legal mumbo jumbo.


    No insult intended so lighten up my friend and go enjoy the football games.
    12 Jan 2013, 03:40 PM Reply Like
  • Thanks for the laugh.
    12 Jan 2013, 05:18 PM Reply Like
  • Geithner bailed out certain AIG claimants and creditors on special interest tickets. Shareholders that lost substantial money ought to have sold before the implosion, knowing the FPD was akin to another Enron. There was plenty of time to do so, from spring 2008 to fall 2008, when many (including this bird) were writing numerous warning comments about the situation. AIG ought to have been liquidated, with competitors given a chance to bid for the carcass. Gov't intervention in this was reprehensible. The lawyers are just looking for work and pay these days on any old pickings, including this one. They need to be neutered: loser pays.
    12 Jan 2013, 12:37 PM Reply Like
  • AIG: Biting The Hand That Feeds It?
    12 Jan 2013, 02:47 PM Reply Like
  • I want to sue for emotional and financial distress that AIG, GS, and all of the 2008 bozos caused me. Surely there is an attorney on this site?
    12 Jan 2013, 05:58 PM Reply Like
  • bgold1955,


    If you want to sue someone, you don't need a reason. All you need is a lawyer.
    12 Jan 2013, 06:07 PM Reply Like
  • A couple of quick points. First, the Maiden Lane lawsuit is one that centers on the contractual obligations of many of the same banks that the government filtered money to through AIG. AIG believes some of those companies breached agreements, breached fiduciary duty, etc., resulting in collateral calls to AIG that led to the bailout. Those institutions, Goldman included, somehow avoided reproach and bailout despite the fact they were involved in as risky or more risky policies than AIG. Second, please keep in mind that AIGs bailout did not result in America's economic problems; an indication of them, perhaps, but it cannot be solely to blame. Third, AIG repaid the government and provided a profit of $22 billion. It also kept about 20 other financial institutions from failing. It is really time to put these old arguments and bad feelings aside, and focus on the business of AIG at this point.
    12 Jan 2013, 09:59 PM Reply Like
  • Johnetoz,


    Thanks for the strong dose of reality and your keen awareness of the worldwide economic cataclysm that would have been caused had AIG had been allowed to default. Not to mention the "emotional state of mind" of many financiers and so-called "pros" around the world.


    The word "uncertainty" is bandied about conveniently today as to why the economy is not performing better. In Fall 2008, who among us was certain as to what an AIG default may have precipitated?


    Again, thanks for your "reality check".
    13 Jan 2013, 03:46 PM Reply Like
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