Corporate Law
Revealed: Terms of AIG Bailout; US to Vote New Shares to OK Deal
Posted Sep 30, 2008, 03:07 pm CST
By Martha Neil
Unusual circumstances call for unusual transactions, as documents newly filed with the SEC concerning the government's planned $85 billion bailout of insurance giant American International Group demonstrate.
Among the terms they reveal are that the U.S. government—which is to purchase not quite 80 percent of AIG via 100,000 shares of convertible participating serial preferred stock—essentially plans to cast its own newly acquired votes in favor of the transaction, reports the New York Times Deal Book blog.
"This clearly would violate Delaware law in normal times, but I would like to see someone win this case," writes Steven Davidoff. "(I doubt any shareholder plaintiffs’ law firm will even bring it after the Bear Stearns case.)"
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