Greenberg Plans AIG Stock Sale: Will It End His Attacks?
American International Group CEO Edward Liddy should be breathing a sigh of relief. AIG may not be at the beginning of the end, but as Winston Churchill once said, it is the end of the beginning.
AIG has sold, transferred or renamed many of its assets. Its first quarter loss of $4 billion was substantial, but a lot less than the fourth quarter debacle of $60 billion, and the smallest loss in a year and a half. No further bailout seems to be necessary, and the stock rose above $2 for the first time since November.
Best of all, AIG could be getting rid of its biggest gadfly, former Chairman and CEO Hank Greenberg. Earlier this month he filed to sell his nearly 13 million shares in the company.
The octogenarian Greenberg has been sticking it to AIG and, most recently, Liddy ever since being ousted from his posts in 2005 on fraud charges brought by then New York Attorney General Eliot Spitzer.
The largest single shareholder of his former company, Greenberg has battled back with a vengeance, even using a private company he owned to compete with AIG and capture its personnel. When that fight ended, he went after AIG again with yet another of his companies, Starr International. In a filing with the U.S. Securities and Exchange Commission in November 2007 he said he was “seeking alternatives” for AIG, a polite way of putting the company up for sale.
As AIG began to slide into oblivion in early 2008, prompted by a loose cannon financial products division that went wild with credit default swaps, Greenberg continued his sniping on CNBC and elsewhere, criticizing Liddy as too small-town to run an international company like AIG. Liddy had previously been CEO of Allstate, the country’s largest publicly-traded home insurer.
When AIG was criticized for the amount of money spent on public relations consultant Hill & Knowlton, AIG responded that much of the money was spent answering Greenberg’s charges.
Now Greenberg is selling his stake in AIG, as well as other stakes in entities he controls, to Starr International, of which he is chairman and CEO. How thoughtful of the company he controls to buy him out of his misery!
As for Liddy, there are other hurdles. He will appear before the U.S. House Oversight Committee on Wednesday to explain “Project Destiny,” his multi-year plan to dispose of AIG’s assets and pay off its TARP debt. If all goes according to plan, Greenberg may not have AIG to kick around anymore.
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Ed Leefeldt is an award-winning investigative and business journalist who has worked for Reuters, Bloomberg and Dow Jones, and is the author of The Woman Who Rode the Wind, a novel about early flight.
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