The Wall Street Journal reports that the former head of AIG's real estate unit, Kevin Fitzpatrick, has filed a lawsuit in New York state court, claiming his ex-employer cut him out of lucrative real estate deals after it received its $182 billion federal bailout.
AIG downplayed the suit by saying it would wage "a vigorous defense." But according to those who knew him at AIG, Fitzpatrick was not a carper or a malingerer looking to make a quick buck in court. "He was a great manager, very effective in running a very profitable business," said a former AIG executive.
And don't count on AIG's general counsel Anastasia Kelly to mount that "vigorous defense." Kelly said she's leaving by the end of the year and other AIG executives could join her if their salaries are cut.
There are two conclusions to be drawn. One is that AIG staffers don't work out of corporate patriotism. They want their money. And if they don't get it they leave, or sue. As already reported, most of the AIG Financial Products unit, despite being the subject of a Congressional uprising last spring, did not return the $182 million in bonuses they received.
The second is that AIG may be spinning out of control and despite all the hopes and dreams resting on the shoulders of CEO Robert Benmosche, he may not be able to save it. After all, even Benmosche threatened to leave in October.
But wait, there is good news. As reported by The New York Times, two AIG subsidiaries, Western National Life and First SunAmerica, "slogged their way back up to the top" of the fixed annuities category. These are basically five-to-seven year contracts that offer a fixed rate of return, usually more than a bank account, because an annuity ties up the money for an extended period of time, much like a certificate of deposit.
When they were originally sold under the AIG moniker sales at these two units plunged. But a thorn by any other name comes up smelling like a rose.