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Published on Mar 21, 2009
Excessive compensation of $1.2 billion to officers and employees of AIG has injured shareholders, customers, competitors and shareholders of competitors. An involuntary filing of a bankruptcy petition by 3 creditors would be an easy way to recover the excessive compensation, as illegal preferences and/or fraudulent conveyances or as compensation based on illegal gambling contracts (i.e., derivatives and credit default swaps). A statute should be enacted as a cure for the problem of excessive compensation, permitting 3 shareholders of a corporation to file an involuntary partial Chapter 11 bankruptcy petition to give the Bankruptcy Court jurisdiction to determine whether illegal excess compensation was paid, and to supervise the recovery of any such illegal excess compensation.