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Oct 9, 2008 9:19 am US/Central
Bailed Out AIG Cancels California Luxury Event
HALF MOON BAY, Calif. (CBS) ―
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The exclusive Ritz-Carlton Resort sits on a hilltop at Half Moon Bay, California.
Ritz Carlton
Following uproar over the $440,000 it spent on a luxury retreat less
than a week after the Federal Reserve loaned it $85 billion, insurance
giant AIG has reportedly called off plans to hold a second luxury
retreat at Half Moon Bay's Ritz-Carlton Resort in California now that
it has accepted an additional $37 billion from the Fed.
"In light of new circumstances we re-evaluated cost of operations... the need to repay the fed while still serving the needs of our policyholders," CNN on Thursday quoted Joe Norton, a spokesman for the insurer, as saying.
On Wednesday, the Federal Reserve Bank of New York borrowed up to $37.8 billion in investment-grade, fixed income securities from AIG in return for cash collateral. Last month, the Fed provided an $85 billion bridge loan to the company, which was on the brink of bankruptcy.
After securing last month's loan, in what the White House termed a "pretty despicable" move, AIG sent its executives on a retreat to the coastal St. Regis resort south of Los Angeles.
The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over this week to the U.S. House Oversight and Government Reform Committee.
Bloomberg News reported Thursday that next week's now canceled Half Moon Bay event was designed to reward and motivate AIG's top producing agents who sell insurance to wealthy clients.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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