Without reading the corporate charter, this sounds a little like WaMU, where something is just being taken over or nationalized without even apparently reference any reference to legal authority to do so


NEW YORK (Reuters) - American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) said on Friday that it will not seek shareholder approval for a plan to issue convertible preferred shares that will give the U.S. government 79.9 percent stake in the insurer.

AIG, which earlier this week signed a definitive agreement to borrow up to $85 billion from the U.S. Federal Reserve, said its board's audit committee had decided that delaying the deal to seek shareholder approval "would seriously jeopardize the financial viability of AIG."

The audit committee thus cleared the way for the deal to be approved without a shareholder vote, AIG said in a statement. The New York Stock Exchange also approved the move.

AIG, once the world's largest insurer, was forced to seek a government rescue earlier this month after its shares entered a death spiral which led ratings agencies to slash its credit ratings forcing it to post billions of dollars in additional collateral on derivatives contracts it insured.

In a related development on Friday, AIG's new chief executive, Edward Liddy, resigned from Goldman Sachs Group Inc's board of directors, citing his new role.

Also on Friday, AIG shareholder Starr International, which is controlled by former CEO Maurice Greenberg, said it had sold 35 million shares in the insurer on Thursday, and now had a 7.8 percent stake in the company.

Greenberg himself sold 5 million shares directly on the same day, according to a regulatory filing.

Earlier this month, Greenberg had been working with investment bank Perella Weinberg Partners on a potential purchase of some of AIG's assets.
Oh yes, another sachs guy.