The U.S. reversed its opposition to a bailout of AIG, the nation's biggest insurer by assets, after private efforts failed and the Federal Reserve decided that ``a disorderly failure of AIG could add to already significant levels of financial market fragility,''.
AIG gives up a 79.9 percent stake to the government and senior managers including Chief Executive Officer Robert Willumstad, 63, will give up their jobs.
The two-year revolving loan gives AIG time to sell assets ``on an orderly basis,'' the New York-based insurer said late yesterday in a statement. The U.S. has the right to discontinue payment of dividends to AIG's common and preferred stockholders, who are already reeling from a 94 percent drop in common shares this year.
