The timing could not have been worse for AIG. I read the first story of the “Retreat” on the heels of the $85 billion and sympathized. AIG will not be able to win. Unlike naked short selling on the stock market, resorts and business actually have and reserve assets. Customers are not allowed to tie up an asset until the fashions or seasons change and they can then fill their position by paying sale prices. The outrage will be unanimous and AIG will be the butt of every joke. Incensed rhetoric of congress and the senate will be heaped upon them.
The story broke as an Executive Retreat that cost $440,000 on the heels of an $85 billion government bail out. AIG tried to explain that it was in support of sales strategies and achievements and not an executive retreat. It really did not matter. While I was amused by the implication, I also understand the reservations were made months or years ago. AIG would probably not going to get a refund if they had cancelled the event. AIG would still be responsible for the cost of the resort and probably to their employees for lost wages and transportation.
The resort, staff, local caterers were all on line to host the event months before AIG was bailed out. It was too late schedule another event of this magnitude. AIG was going to pay whether the event was held or not. Everyone seems to have forgotten the entertainment industry has non-refundable booking fees. The meals, rooms, facilities are reserved in advance and cancellations are penalized depending on the amount of time to restructure and allow other arrangements during the time slot. AIG was going to pay, end of subject.
The first retreat was held the weekend following the $85 billion bail out. After the request for an additional $37.5 billion the next “Sales Seminar” was cancelled. Will AIG still have to pay? Or will they get more favorable treatment than I would under the same circumstances?