September 17, 2008

U.S. taps Allstate's Liddy to lead AIG

By James P. Miller |Tribune staff reporter

8:28 AM CDT, September 17, 2008

Former
Allstate Corp. CEO Edward Liddy has been tapped by the U.S. government
to head American International Group Inc. in the wake of the Federal
Reserve's seizure of a controlling stake in the troubled insurer,
according to published reports.

Liddy, who joined the private-equity firm Clayton, Dubilier & Rice
as a partner only four months ago, will succeed Robert Willumstad,
according to reports in The Wall Street Journal, Financial Times, and
Bloomberg news service.

Those articles, citing unnamed sources, said the government demanded
the departure of Willumstad -- who moved into the top spot at AIG in
June after his predecessor was forced out because of the insurance
giant's deepening mortgage-related problems -- as a requirement of the
Fed's $85 billion bailout plan.

Under that plan the Fed agreed to lend $85 billion to AIG, allowing the
company to avoid filing for bankruptcy protection, in exchange for
warrants that will provide Uncle Sam with an 80 percent stake in the
privately owned company. The government opted for the highly unusual
corporate rescue because authorities determined that an AIG bankruptcy
would send damaging tremors through the nation's already-stressed
financial system.
Liddy, a onetime finance executive with G.D. Searle & Co., later
served as CFO of retailer Sears Roebuck & Co. In that role, he
helped oversee Sears' 1995 spinoff of its Allstate segment. He served
as Allstate's president and chief operating officer from 1994 to 1998,
then held the chairman and CEO titles from 1999 until he stepped down
as chief executive in 2006. He retained the chairman's post until April
of this year.

Liddy earned high marks for his tenure at Allstate, where he
implemented substantial cost-saving measures in the wake of the spinoff
from Sears.

AIG's incoming CEO, who is a graduate of the Catholic University of
America and holds an MBA from George Washington University, is
currently a director of 3M Co., Boeing Co., and investment banker
Goldman Sachs.