To hear the folks at AIG describe it, it’s in our interest to pay out all this money to their CDS counterparties and keep the bonus money flowing because — in addition to not destroying the global banking system — we’ve got to maintain the value of all the good parts of AIG that we’re going to sell off and get our money back.
But there are disturbing reports emerging that outside of AIGFP, where everyone is getting paid out at full dollar value, at the tried and true subsidiaries they’re stiffing people they owe money to and letting whole operations basically drive into the ditch.
Here’s one example we’ve unearthed with AIG’s real estate unit basically walking away from one of their ill-advised mega-deals for some sixteen thousand residential apartments. It makes this part of AIG look like the corporate equivalent of one of those trashed and abandoned subdivision homes now gone to seed because the owners have walked away from it when they couldn’t pay the mortgage.
Whether this is representative of the rest of the company is not at all clear. But it suggests at a minimum that we — as owners of the company — need to be asking a lot more questions about just how this behemoth is being run.