AIG Breakup: $1 Billion Payday for Wall Street

August 6, 2009

(ChattahBox)—According to an analysis conducted by the Wall Street Journal (WSJ) on Wednesday, Wall Street is poised to reap a $1 billion payday from the controlled breakup of insurance giant AIG. The government is seeking to recoup some of the more than $100 billion in federal bailout money awarded to the company to keep it from failing.

With the federal government owning a 80 percent ownership stake in AIG, a multi-year plan controlled breakup plan would net Wall Street banks and lawyers nearly $1 billion in fees to help break up the giant company.

According to WSJ, the fees for the AIG breakup represent one of the biggest bonanzas in Wall Street History. The AIG fees would amount to four times the fees paid for the 1996 breakup of AT&T Corp. and nearly double the fees earned in Visa USA’s 2008 initial public offering.

The biggest winner in the deal is Morgan Stanley, which could collect about $250 million. Bank of America Corp, Blackstone Group LP, the law firm Davis Polk & Wardwell LLP, accounting firm Ernst & Young, Goldman Sachs Group Inc and JPMorgan Chase & Co, also can expect big paydays from the AIG breakup.

As the AIG breakup progresses, the paper notes that potential conflicts may arise with companies involved in the deal that the government also regulates.


Comments

2 Responses to “AIG Breakup: $1 Billion Payday for Wall Street”

  1. Old Man Dotes on August 6th, 2009 1:01 pm

    Any chance of using AIG executives to feed the hungry, ala Soylent Green? Please, please say yes!

  2. make money on August 11th, 2009 12:51 pm

    Well AIG was among the biggest beneficiaries of the Government Bailout plans. AIG almost went out of the radar but US Government bailed it out by spending a lot of money.
    AIG is coming out stronger and this is the good news for the Government and the share holders.

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