Not Paying $165M Bonuses Could Open AIG -- and Taxpayers -- to $330M Lawsuit

[tekisui]

Source: ABC News

When AIG chief executive officer Edward M. Liddy argued that legal obligations made it nearly impossible for the bailed-out firm not to pay $165 million in retention bonuses, critics found it hard to imagine a worse scenario for taxpayers whose money has already been used to keep the company afloat.

But AIG and legal experts agree that, as far as payouts to employees go, it could indeed be worse -- twice as bad, to be exact.

If the crumbling insurance giant didn't make good on its retention packages, employees could sue the firm for at least $330 million -- double the total size of the bonuses.

And, some say, a successful lawsuit could ultimately mean a higher tab for taxpayers, who are already footing the bill for $162.5 billion in rescue loans and investments into AIG from the federal government.

http://abcnews.go.com/Business/Economy/story?id=7097759&page=1

[hobbit709]

1. Better not put me on that jury.

[Donnachaidh]

2. oh bullshit!

Do these assholes think they are untouchable? Yeah, they do deals that effectively KILL the company, and they think some contract is going to allow them to get BONUSES?

Bring it bitch. :grr:

[Locrian]

4. bring it

Oh - you mean it's a contract? Like the contracts with labor Reagan broke back when he was president?

[billybob537]

3. Instead of retention bonuses

How about PINK SLIPS
Do we the new owners of AIG really need the "TALENT" that destroyed the company?

[rocktivity]

5. A contract is supposed to be an exchange.

You give me $300 a month, I give you a car.

You manage my rock band's business affairs, we give you 15%of our earnings.

Since the execs clearly didn't meet their performance goals, what was exchanged? What does AIG get in exchange for their money--the promise that they wouldn't quit?

But if it does turn out that they're right, just levy a 100% surtax on the money.

:shrug:
rocktivity

[tekisui]

6. It is absurd, and a mess.

[depakid]

7. "employees could sue"

Yhere's a difference between exposure and liability.

Just as there's a difference between a claim and a judgment.

AIG employees of all people ought to know that by now,

[Skink]

8. Let's see how this plays out.

Might even be able to set a good precedent.

[justgamma]

9. Let's see which ones have the

guts to sue. They have to know that the backlash would be tremendous. They are not the most popular people in the world right now. They should slink away quietly.

[northernlights]

10. fine. we'll just countersue for $600M

for nonperformance of your contract to EARN revenue.

Bring in on, jerks.

[rocktivity]

22. DING DING DING! Northernlights, you're our grand prize winner!

...We'll just countersue for $600M for nonperformance of your contract...

That's it--call their freaking bluff, and see how much public sympathy they get. Hey, and could we the people file it as class action lawsuit? Bring it on, indeed!


rocktivity

[Historic NY]

11. Fine so sue US, its our money not theirs.

[alcibiades_mystery]

12. Let them sue...let them fucking sue

Seriously. Let them sue. I'd rather fight and lose on $330 million than knuckle under for $165 million. It's the fucking principle of the thing at this point. Let them fucking SUE. Fight them until the end of time. Pay only when ordered by the court. Fuck them with a giant stick.

[L0oniX]

15. Who will they sue? The 80% of AIG that the tax payers own or the other 20%?

[RaleighNCDUer]

13. As I understand it (which is poorly) the bonuses are based on numbers of

transactions for which they could charge transaction fees, the fees being the marker to which the bonuses were attached.

They traded and re-traded increasingly worthless paper, charging the fees at every possible step, with full knowledge that the paper WAS worthless just to make themselves eligible for the bonuses. It's a variant on what Enron was doing. It's called fraud.

Is my understanding completely off base?

[L0oniX]

14. Charge them with crimes now! You can't profit from crime.

[tekisui]

16. Sounds good to me.

[Gin]

19. here's a retention bonus for you A-holes....a weekend with Bernie

in his new "pen-house!"

[TwilightGardener]

17. Contracts are overruled or modified in court all the time--claim "mutual mistake" and

say you didn't understand the terms or didn't intend to do X, or pay Y--taken care of.

[DireStrike]

18. Congress needs to enact a 100% tax on bonuses to AIG executives. And all executives really.

[Incitatus]

20. Could what the AIG execs done be considered fraud?

They should have known that what they were doing would tank the company. They didn't care because they just wanted their bonuses. They intentionally destroyed the company for personal gain.

Since the government basically owns the company now, it should go through all their emails to see if there is any discussion among AIG execs about consequences of their risky activity while they were engaging in it.

[madmom]

21. That sounds like a threat to me!

[alfredo]

23. Tom Toles

[DS1]

24. How many of them have the courage to attach their names to a public lawsuit?