Former Allstate chief to take charge of AIG
American International Group Inc. said Thursday it has named former Allstate Corp. Chief Executive Officer Edward Liddy as chairman and chief executive in the wake of the Federal Reserve taking a controlling stake in the troubled insurer.
Liddy, who joined the private equity firm Clayton, Dubilier & Rice as a partner four months ago, replaces Robert Willumstad, who took over the company in June.
AIG, one of the world's largest insurers, teetered on the brink of bankruptcy early this week as it sought fresh cash to help shore up its balance sheet, which was facing a liquidity crunch amid the continued downturn in the credit markets.
As part of the deal, the Federal Reserve will provide the New York-based company with a two-year, $85 billion loan. In return, the government will get a 79.9 percent stake in AIG and the ability to remove senior management.
Liddy, 62, spearheaded Allstate's initial public offering and spinoff from Sears, Roebuck & Co., where he served as an executive. He joined Allstate in 1994, serving as president and chief operating officer from 1994 to 1998. He was chairman and CEO from 1999 to 2006.
Liddy retired from Allstate in April.
Shares of AIG rose 18 cents, or 8.8 percent, to $2.23 in afternoon trading.
Copyright 2008  AP News
