AIG’s Declaration of Independence

BLOOMBERG BUSINESS WEEK/JUNE 7,2010

By:  James Sterngold and Hugh Son

Excerpts:

“Cliff Gallant, an analyst at Keefe Buyette and Woods, wrote a report in late April saying that the insurer’s shares, which have rated as high at 44.51 this year, are worth 6 at best, and are possibly worthless.   The government’s plan to sell off its 79.9 percent holding, he added, ‘may not be executable.’  The assessment so concerned AIG’s outside directors that they ordered their own review…  The analysis… conceded… that AIG’S book value…. May face ‘a number of risks.’”

“… Benmoshe… (is) now engaged in methodical restructuring.  To do that, Golub says the company might seek yet another improvement in the terms of its bailout before moving on to repayment.  In the past that has meant cutting the government’s debt of equity or cutting interest terms.   Such change would constitute the fifth easing of those terms.”

“The government is not objecting.”