Former AIG CEO Hank Greenberg says everyone would have been better off filing Chapter 11, taxpayers won’t be paid back the TARP funds lent to AIG unless the loan terms are restructured, and he is not poaching AIG employees.
Also, he’s no longer a billionaire.
Greenberg was interviewed yesterday by Fox News‘s Neil Cavuto, who spoke to the former AIG chairman about the need to restructure the AIG loan terms if taxpayers want to see any of their money paid back.
Cavuto: “The gist of it is that we threw a lot of money at this puppy and it’s still a hurting puppy.”
Greenberg doesn’t think AIG should have agreed to the original “mob terms” of the $85 billion loan, they would have been better off Chapter 11. Actually, says Greenberg: “Everybody would have been better off Chapter 11.”
The problem, Greenberg says, is that AIG was held responsible for the full 100-cents-on-the-dollar repayment of insurance loans it made to the big banks, even though they were only selling at “40-50-60 cents.” So essentially, he says, AIG’s TARP funds were mostly just pay outs to benefit Goldman Sachs et all funneled through AIG.
But were the banks too big to file Chapter 11? Greenberg says the feared domino effect can not be proved or disproved.
Cavuto also badgered him a bit about whether or not the rumours are true that Greenberg is poaching AIG men to come work for him at “AIG Two,” C.V. Starr. Greenberg said a few times “no,” “we have [only] hired between 13-15 people” from AIG before Cavuto pressed him further.
Greenberg finally told him, “No. Do not go down that alley. You are chasing nothing. I am serious.”
If there’s still hope for AIG, which Greenberg says there is, if they restructure the loan agreement, then there’s still hope for his own ailing (ish) bank account. Greenberg is still the company’s largest shareholder, aside from the government. He told Cavuto that he’s no longer a billionaire, but is working hard.
Cavuto needs AIG to regain its footing too; he has an AIG life insurance policy. “I have to disclose here that I have AIG as my life insurance policy. They’ve been valued at about 50 bucks. My insurance agent said Neil, I wouldn’t go out in traffic.”