The Bumbling At AIG (AIG) Continues

AIG’s (AIG) management has repeatedly promised that it will get taxpayers back every dime of the $180 billion that the government has put into the insurance company in one form or another. Part of the program to raise cash is the sale of most of the firm’s most attractive assets. One of those businesses is AIG”s asset management operation which may be worth as much as $800 million.

The Wall Street Journal reports that the head of the asset management unit has been the top negotiator for the sale, which may be a conflict of interest since his job could be on the line. Whether it is his fault or not, many accounts of the attempt to market the business indicate that AIG has been ham-handed in its efforts to get a good price. As of yesterday, most of the major bidders had dropped out of talks.

AIG’s most reasonable chance to get taxpayers back their money, even if it is only a dime, is through divesting businesses like the asset management company and AIG’s huge aircraft leasing operation. It is nearly impossible to imagine that none of AIG’s most attractive operations have not been sold, even if the harsh credit market makes it harder for acquirers to raise money.

AIG’s sitting CEO Liddy decided to leave the company and announced his departure about two months ago. He may know something that AIG is not letting onto which is that no one inside the firm has the skills to essentially liquidate the company.

Douglas A. McIntyre