The company goes bankrupt, seeks help. The savior comes in and offers help in return for a majority ownership; eventually the company survives. The previous owners, now, are furious and suing the savior, and may be the company as well. Strange as it may feel, such is the gratitude.
AIG's share price fell from $70 to $1.25 in Sept-2008, a loss of 98% value. It reported loss of over $13 billion from Jan-2008 to June-2008.
However, since the US government's bailout there has been a steady recovery of the company's market value:
From a low of $2.69 b the value has recouped to $58.57 b.
It would be difficult to imagine what would have happened if there was no help from the government. Only based on an analysis of no-help valuation to post-help valuation it will be possible to award justice.
One way to calculate the value of benefit to the shareholders (other than government) would be: The difference between $2.69 b accruing in full and that portion from $58.5 b accruing to them. That is, how much their shares were worth before bailout and now.
It is easy to assume that under bankruptcy the sale of assets would have been at distressed values. Alternative argument from the claimants should be demonstrable. Otherwise the case is void ab initio.
AIG's share price fell from $70 to $1.25 in Sept-2008, a loss of 98% value. It reported loss of over $13 billion from Jan-2008 to June-2008.
However, since the US government's bailout there has been a steady recovery of the company's market value:
| Jan. 7, 2013 | 58.57B |
| Sept. 30, 2012 | 53.45B |
| June 30, 2012 | 57.57B |
| March 31, 2012 | 58.48B |
| Dec. 31, 2011 | 44.06B |
| Sept. 30, 2011 | 41.66B |
| June 30, 2011 | 55.61B |
| March 31, 2011 | 63.14B |
| Dec. 31, 2010 | 8.081B |
| Sept. 30, 2010 | 5.284B |
| June 30, 2010 | 4.652B |
| March 31, 2010 | 4.607B |
| Dec. 31, 2009 | 4.036B |
| Sept. 30, 2009 | 5.936B |
| June 30, 2009 | 3.122B |
| March 31, 2009 | 2.691B |
| Dec. 31, 2008 | 4.223B |
| Sept. 30, 2008 | 8.954B |
| June 30, 2008 | 70.47B |
| March 31, 2008 | 109.09B |
From a low of $2.69 b the value has recouped to $58.57 b.
It would be difficult to imagine what would have happened if there was no help from the government. Only based on an analysis of no-help valuation to post-help valuation it will be possible to award justice.
One way to calculate the value of benefit to the shareholders (other than government) would be: The difference between $2.69 b accruing in full and that portion from $58.5 b accruing to them. That is, how much their shares were worth before bailout and now.
It is easy to assume that under bankruptcy the sale of assets would have been at distressed values. Alternative argument from the claimants should be demonstrable. Otherwise the case is void ab initio.
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