The arrogance of these directors! As the Lehman Brothers debacle showed, the Fed was not rescuing AIG because AIG “deserved” to be rescued. The Fed was rescuing AIG–exercising its powers under Section 13(3) of the Federal Reserve Act for the first time that I know of since the Great Depression–because of the risk that the bankruptcy of the firm would pose a systemic risk to the real economy. AIG didn’t “deserve” anything. It’s rescue was necessary, and the interests of its management and shareholders irrelevant.
AIG’s directors seem to think they were entitled to a bail-out that put the risk on the taxpayers but left the profit to the shareholders. Outrageous! It’s unclear (at least to me) from the SEC filing whether the government’s security interest in AIG’s assets is senior to that of other creditors, but if it’s not, then I’d say the government didn’t go far enough.
The only remark that may be more ridiculous than the remarks of AIG’s directors is the letter AIG founder Hank Greenberg sent to the company complaining that its current management had “presided over the virtual destruction of shareholder value built up over 35 years.” Greenberg, after all, was in charge of AIG on the way up. Pretty churlish to blame those with the bad fortune to be in charge on the way down.