Sunday, July 18, 2010
AIG is now on the hook to pay more than $1 billion as a result of lawsuits settled in Ohio over the one-time insurance giant’s illegal business practices. The largest of the settlements, $725 million, is owed to three Ohio pension funds that claimed they were the victims of accounting fraud, stock manipulation and bid-rigging by AIG prior to its near collapse in 2008.
Now the question is how AIG is going to come up with the $1 billion it needs to pay. Executives are reportedly mindful that they don’t dare use any of the $22 billion provided to AIG during the Wall Street rescue a couple years ago. Instead, AIG officials say they intend to pay $175 million now, and raise $550 million through a stock offering in the spring of 2011. “That prospect struck some market analysts as a long shot,” wrote The New York Times.
-Noel Brinkerhoff
A.I.G. to Pay $725 Million in Ohio Case (by Michael Powell and Mary Williams Walsh, New York Times)
Cordray Secures Record Settlement with AIG (Ohio Attorney General)
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