AUGUST 2010: French and German banks were the
biggest beneficiaries of the US government's $70bn capital injection
into AIG. Assets Relief Programme (TARP) said Banks including Societe
Generale and Deutsche Bank benefited in part from $105bn of
counter-party payments from AIG, payments which would not have been
made had the US government not stumped up as much as $182.5bn in total
federal aid to stabilise the insurer. Instead of asking for help from
othert countries the USA tried to shore up on their own pumping and
printing money top assist these companies. The Treasury has never found
where these funds actually went to???
APRIL 2009: Activist investors WANT to block the re-election of
American International Group Inc director James Orr, chairman of the
insurer's board's compensation committee, the Wall Street Journal said.
Orr failed to oversee $165 million in retention bonuses approved in
early 2008 BUT ALLOWED bonuses to employees in AIG's Financial Products
unit after the insurer had accepted up to $180 billion in government
aid, sparking outrage.The U.S. government
appointed the three trustees after taking a stake in the insurer last
year, and in early March the voting rights for the nearly 80 percent
stake was transferred to them.
MARCH 2009: AIG is contractually obligated to pay aprox $165
million of previously awarded "retention pay" to employees by Sunday,
March 15. Another $55 million in retention pay has already been
distributed to about 400 AIG Financial Products employees.American
International Group is giving its executives millions of dollars in new
bonuses even though it received a taxpayer bailout of more than $170
billion dollars. AIG declared earlier this month that it had suffered a
loss of $61.7 billion for the fourth quarter of last year, the largest
corporate loss in history.I wonder why Liddy never said this when he
asked for funding & why nothing was done to stop this mess. AIG
should have gone bankrupt.??
73 separate company employees received
bonus cheques of US$1 million or more at the weekend. Eleven of the
employees no longer work for the company. The largest bonus was US$6.4
million and seven other people received more than US$4 million
each.House Democratic leaders announced plans for a vote Thursday on
legislation to tax away 90 per cent of bonuses paid to top-earning
employees at AIG and other companies receiving big government bailouts.
New York Democrat Charles Rangel, who chairs the tax-writing House Ways
and Means Committee, said Wednesday the tax would hit employees making
more than $250,000 a year.Liddy the CEO for AIG refuses to name the
Liddy said he must pay
bonuses??? Source CBS news:
WHAT A JOKE???? &
THANKS TO PAULSON & BUSH for not vetting this payout properly.
The government moved to increase aid to
AIG to a total of 150 billion dollars as the troubled insurer announced
24.5 billion dollars in net losses in this latest quarter. Struggling
insurance giant AIG will be receiving even more bailout
money from the US government. The government is now expected to provide
about $27 billion more than originally planned.The Treasury Department
will also pay $40 billion for an additional 2 percent stake in the
company.Now isn't this silly when the same guys are running the show
and this could lead to more losses.
American International Group Inc. is
expected to report third-quarter loss of 90 cents a share, according to
analysts surveyed by Thomson Reuters. Leading industry analysts have
said that turmoil in equity and credit markets has been hampering AIG's
efforts to sell some of its businesses, a crucial part of the insurer's
plan to repay billions of dollars in expensive government loans. Rival
insurers that may be considering bidding for AIG businesses are now
facing their own problems as slumping stock prices and wider credit
spreads cut into capital. That's slowing what investors hoped would be
fast asset sales by AIG, possibly preventing the insurer from quickly
repaying the Federal Reserve's loan so they will have problems and so
will the Fed.
But guess what theyve been doing with
money they already got and with no game plan how to use it. Will AIG
request more funding by Mar 2009? The USA Govt made the crazy decision
of helping AIG when there was no plan on how to use this money. The 85
billion was to assist AIG to protect millions of people with
retirements, investments and insurance tied to AIG who otherwise were
"going to have their lives destroyed because of the greed and excess
and corruption." Well they have decided otherwise and like any of the
bailouts they are just a sham that the American people will have to
poay for. All they are doing is propping up the execs of the companies
and noone else.
But guess what has happened practically
nothing & what about the accounting and where this money will be
spent. Bet your life the execs will have a handout so read on. After
the bailout of AIG last month, the United States government effectively
bought an 80% share in the company. That should have caused a
fundamental change, you would think, in how the company was spending
funds on compensation, bonuses and benefits. But it doesn't look like
that's what happened.
Less than a week after getting the $85
billion commitment, AIG
execs went on a week-long retreat at the luxurious St. Regis Resort
in Monarch Beach, Calif. The trip cost AIG almost half a million
dollars, including $200,000 for rooms, $150,000 for meals and $23,000
in spa charges. The tab also included $25,000 in "leisure dining.
American International Group (AIG) also continues to pay $1 million a
month to an executive at the center of the company's failure, Waxman,
the chairman of the House Oversight and Government Reform Committee,
"Their executives are walking
away with millions of dollars while taxpayers are stuck with billions
of dollars in costs," the lawmaker added. Waxman said his
staff reviewed thousands of pages of documents for Tuesday’s hearing on
AIG, which is the second of at least five hearings to be held as part
of an investigation into corporate misdeeds amid the credit meltdown.
The site of the AIG retreat was the St. Regis Resort in Monarch Beach,
where rooms cost more than $1,000 a night. Rep. Elijah Cummings
(D-Md.) went through the company’s bills at the hearing.
"They were getting manicure, pedicures,
facials," Cummings said. "They spent $25,000 on 'leisure dining.' I
don't know what that is." "That's bars," explained Rep. Jackie Speier
(D-Calif.) The Wall Street mentality has not changed.
2009 Obama is saying as we say the
Recession was caused by the finance and banking execs who paid
themselves large amounts of bonuses & salaries. These & their
board of directors are the ones to blame to the financial collapse.
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Its wake up time America.
These bailouts are not helping the American people just Companies who
have reaped millions in rewards and done nothing to change their
strategies over the years. None of them deserve bailouts and the US
government cannot run these joints??? so the underlying question is how
much of thise bail out money will be spent on themselves---- most of it
BANKRUPTCY UNDER CHAPTERS
7 & 11
11 of the Bankruptcy Code means to "reorganize" the company
and try to become profitable. Management continues to run the
day-to-day business operations but business decisions must be approved
by a bankruptcy court.
Under Chapter 7, the
company stops all operations and goes completely out of business. A
trustee is appointed to "liquidate" (sell) the company's assets and the
money is used to pay off the debt, which may include debts to creditors
The investors who take the least risk
are paid first. eg secured creditors take less risk because the credit
that they extend is usually backed by collateral, like a mortgage or
other company assets. They know they will get paid first if the company
Bondholders have a greater potential for
recovering their losses than stockholders, because bonds represent the
debt of the company and the company has agreed to pay bondholders
interest and to return their principal. Stockholders own the company,
and take greater risk. They could make more money if the company does
well, but they could lose money if the company does poorly. The owners
are last in line to be repaid if the company fails. Bankruptcy laws
determine the order of payment.