03.30.09
Helpless Against AIG Bonuses?
One bankruptcy blogger isn’t so sure. From the intro:
We’ve heard Fed Chairman Bernanke and Treasury Secretary Geithner say that there are no legal avenues to clawing back the AIG bonuses. I’m not so sure that’s true. What about good old fraudulent transfer law? That’s a cornerstone of creditor-debtor law. Would fraudulent transfer law apply?
Every state in the union has a fraudulent transfer law. But there is also a special (and virtually unknown) federal fraudulent transfer statute just for the United States government, as creditor. The federal government could, of course, proceed under a state fraudulent transfer law (I’m not sure which state’s law would apply to AIG), but why bother when it could proceed under its own law?
So would the government be able to clawback AIG’s bonuses with a fraudulent transfer action?
Maybe.
