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The Aig Bailout, William K. Sjostrum, Jr.

Washington and Lee Law Review

On February 28, 2008, American International Group, Inc., the then largest insurance company in the United States, announced 2007 earnings of $6.20 billion or $2.39per share. Its stock closed that day at $50.15 per share. Less than seven months later, however, AIG was on the verge of bankruptcy and had to be rescued by the United States government through an $85 billion loan. Government aid has since grown to $182.5 billion, and AIG's stock recently traded at less than $1.00 per share. The Article explains why AIG, a company with $1 trillion in assets and $95.8 billion in shareholders' equity, …