Don’t Hold Your Breath Waiting For an Apology
[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced.]
Your company’s breathtaking recklessness, greed, and — above all — stupidity(!) blow a $200 billion hole in its balance sheet, threatening the global financial system and requiring an unprecedented emergency bailout by the federal government.
You react by:
A. Saying a heartfelt “Thank You!” to taxpayers;
B. Complaining that the Government was much more lenient in its treatment of other Too-Big-to-Fail financial institutions;
C. Slinking away in shame, never to be heard from again;
D. Suing the federal government for $40 billion, arguing that its 2008 bailout of your company exceeded its authority.
Answer(s): “B.” and “D.” (alas, “C.” was just wishful thinking).
Amazingly, in a decision handed down this week, a federal court agreed that the government overstepped — but awarded Greenberg $0 damages.
That’s because AIG shareholders (Greenberg included) were manifestly helped, not harmed by the government’s actions (they would’ve gotten zero in a bankruptcy, the company’s certain fate otherwise, versus a fraction of the surviving company).
Bonus question: if you’re Greenberg, what you do now?
Appeal (‘natch).
Redefining “Chutzpah”
Here’s an unsolicited suggestion for the ‘feds: sue — make that, prosecute — Greenberg for gross negligence, failure to supervise, fraudulent financial disclosure, etc. for his role in The Financial Crash.
After all, it was AIG’s London subsidiary that insured all the toxic, housing-related derivatives at the heart of the 2008 melt-down.
Then, David Boies, Greenberg’s all-world attorney, can really earn his money.
See also, “Deconstructing AIG: Define, ‘Almost‘”; “AIG Explained“; and “Wall Street Fox Plunders Henhouse, Blames Chickens.”
P.S.: My theory about Greenberg’s lawsuit?
He know he’s guiltier than sin, and it’s all a ploy to stay out of jail.
As they say, “the best defense is a good offense.”
