Greenberg urges AIG to consider alternative bailout plan

By Lisa Kerner

Charlotte, N.C., Oct. 30 - American International Group, Inc. investor Maurice R. Greenberg once again proposed the company consider a "plan B" bailout in which the current Federal loan would be converted into a senior preferred security.

According to Greenberg, the need to sell the assets of the New York financial and insurance services company in a "rapid, fire-sale manner" would be reduced.

Greenberg made his comments in an Oct. 30 letter to AIG included in a schedule 13D filed with the Securities and Exchange Commission.

"Under this plan, AIG stakeholders would be treated neither any better nor any worse than stakeholders in other companies receiving assistance from the government," the letter said.

Greenberg asked AIG chairman and chief executive officer Edward Liddy to publicly weigh in on the matter.

In a prior letter, Greenberg, AIG's former CEO, said the loan to the company from the federal government "will result in the liquidation of AIG, the loss of thousands of jobs, and the irretrievable loss of billions of dollars in shareholder value."

It was previously reported that the Federal Reserve Bank of New York agreed to lend up to $85 billion to AIG. The loan runs for 24 months and is priced at Libor plus 850 basis points. The Fed later agreed to lend up to an additional $38 million to AIG.

Greenberg, in an Oct. 13 letter to Liddy, suggested that the loan be changed to non-voting preferred stock with an approximately 5% to 6% dividend and a 10-year right of redemption for AIG at a 10% premium.

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