The cash burning enterprise know as AIG is getting attacked from within. Wilma Walker, an AIG shareholder is suing under the auspices that the company’s decision to accept the government’s cash without getting shareholder’s approval was illegal. Perhaps she’d prefer the company just went under?
Bloomberg: AIG’s board violated Delaware corporate law by refusing to allow existing shareholders to vote on a key part of the bailout proposal, which gives a 79.9 per cent stake to the government in return for $85 billion in loans, investor Wilma Walker said in a complaint filed yesterday in Delaware Chancery Court in Wilmington. New York-based AIG, the nation’s biggest insurer by assets, is incorporated in Delaware.
“All AIG shareholders stand to be disenfranchised and diluted out of existence as a result of the conduct of AIG’s board of directors,” Walker, a New York City resident, said in the complaint.
…Under Delaware law, common shareholders get to vote separately whenever a company seeks to increase its authorised shares of common stock, according to the complaint. Delaware judges “assiduously safeguard the voting rights of stockholders,” Walker said in the complaint.
AIG’s board also violated its legal duties to shareholders by agreeing to the bailout package without having common shareholders vote on the move, according to the complaint.
Walker seeks to have a judge throw out the conversion of the preferred shares into common stock without a shareholder vote, and find that AIG directors erred by agreeing to the deal.
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