Hank Greenberg Ready to Testify About General Re Transaction

Hank Greenberg Ready to Testify About General Re Transaction

AIG’s former CEO Maurice “Hank” Greenberg has indicated that he is ready to testify regarding AIG’s transaction with Berkshire Hathaway’s General Re group in 2000. The transaction in question was orchestrated by General Re in a manner that allowed AIG to inflate its loss reserves by $500 million. Mr. Greenberg was never charged with a crime but prosecutors identified him as an unindicted co-conspirator and he refused to testify citing his fifth amendment right against self incrimination. Now that the statute of limitations has apparently expired, Mr. Greenberg is willing to provide testimony in the case. Read this article for more details.

General Re Settlement in AIG Case Closes Difficult Chapter

General Re, a Berkshire Hathaway subsidiary, has reached a $92 million settlement with the federal government which will allow the firm to avoid prosecution for its role in an accounting fraud involving AIG. The Wall Street Journal reports that the settlement also includes corporate governance changes that will require Berkshire Hathaway’s Chief Financial Officer to attend meetings of General Re’s audit committee and mandates that General Re appoint an independent director. Read this article for more details.

Berkshire Lends a “Helping Hand” to AIG and XL Capital

Warren Buffett is not one to deny a friendly helping hand to companies in financial distress — at a price, of course! The Wall Street Journal reported today that a subsidiary of Berkshire Hathaway signed “cut-through endorsements” with AIG and XL Capital when they were struggling last year due to impaired credit ratings. Cut-through endorsements directly protect the buyer of a policy by providing backup coverage in cases where the primary insurer defaults on its obligations. Read this article for more details.

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