AIG Recalls Exec to Fend Off Default: Report
American International Group persuaded a senior executive at its troubled financial products group to rescind his resignation to help avoid default on $234 billion in derivatives, the Financial Times reported Wednesday.
James Shephard, deputy chief executive of Paris-based Banque AIG, changed his mind after resigning less than a month ago over the bonus furor and will stay to unwind complex trades, the paper said, citing AIG insiders.
French banking regulators threatened appoint their own manager of Banque AIG after the departure of top executive was announced.
An appointment of an external manager chosen by France may have triggered a default on the derivatives by constituting a change of control of the contract, legal experts told the paper.