Journalism in the Public Interest


A Mini Mystery in AIG’s Sale of Insurance Subsidiary

Stan Honda/AFP/Getty ImagesDid the bankers involved in selling one of AIG’s biggest subsidiaries know about the tax issue that AIG has been keeping from potential buyers?

We wrote earlier about AIG’s problem. It involves one of the firm’s “crown jewels”—the foreign life insurance companies that AIG is planning to offload to help repay taxpayers to the tune of $60 billion.

The company has known for years about a tax issue that, in a worst-case scenario, could decimate it—but they decided to keep potential buyers in the dark about it.

We wanted to know whether they also kept it from the bankers they’ve hired to market the subsidiary—called American Life Insurance Company, or Alico. The two banks involved—Citigroup and Goldman Sachs—both declined to comment on whether they knew of the problem before they prepared a 400-plus-page marketing document sent to possible bidders earlier this year.

They also declined to comment on whether AIG or Alico has let them know about it since.

It’s important because, according to analysts, AIG will struggle to repay the $60 billion bailout loan from the Treasury unless they get a good price for Alico, and the tax problem threatens to make that a more difficult task.

What is Citigroup doing Buying any risky assets.
Are they planning to jack theri credit card rates up again to offset the cost (Lose). or they so giddy about another bite at the TARP pie they don’t care if they screw up again. or are they Hoping that Congress pushes this ‘nationizaton’ idea so they can walk away from theri Spilt milk and let Tax payers clean up the bigger mess again. Only of course to come back after all is tidied up to ‘repurchase’ the new and improved Bank afterwards? Ya gotta love when oters are responsible for wiping your ass for you! TARP should be renamed the BIDET