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AIG gov't bailout was only option, former CEO testifies

Deal was voluntarily accepted by AIG's board, former CEO Robert Willumstad says,because the insurer didn't have a handle on its cash requirements and underestimated the amount of money it needed.

By Andrew Zajac, Bloomberg | Updated on November 06, 2014

(Bloomberg) — American International Group Inc.’s bailout by the U.S. in 2008 was seen by the company’s board as its only rescue option at the time, former Chief Executive Officer Robert Willumstad testified.

The insurer’s board acted in “the best interest of all the stakeholders of AIG” when it approved an $85 billion loan requiring it to surrender 80% of AIG’s equity and pay a 14% interest rate, Willumstad said in the trial of Maurice “Hank” Greenberg’s lawsuit challenging the rescue.

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