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June 25, 2009 5:10 PM

AIG Deals Net Work for Five Am Law Firms

Posted by Zach Lowe

Yesterday, our colleague Nate Raymond did some math to figure out that AIG has paid Weil, Gotshal & Manges somewhere around $30 million--probably more--in the last year, good for about 3.3 percent of Weil's total income in that period. That's a ton of work, and today we learned a little bit more about what Weil has been doing for the ailing insurer all these months. (Side note: Doesn't it feel like it's become mandatory in the media to refer to AIG as an "ailing insurer"? I think we need to do better.) 

The firm, along with Debevoise & Plimpton, advised AIG in structuring a complicated transaction with the Federal Reserve Bank of New York that is designed to cut the insurer's debt to the central bank by about $25 billion, according to Bloomberg and the New York Times. The insurer is preparing its two largest overseas insurance businesses for initial public offerings, and it has agreed to hand over equity stakes in both units to the New York Fed. The Fed will get a $16 billion stake in American International Assurance Co. (AIA), which operates mostly in Asia, and a $9 billion stake in American Life Insurance Co. (known as Alico), which operates in more than 50 countries around the world, according to Bloomberg. 

The Weil lawyers on the deal could not be reached for comment, but lawyers familiar with the matter confirmed Weil served as cocounsel along with Debevoise. Partners John Vasily and Edward Drew Dutton led the Debevoise team on the deal. Vasily was boarding a plane when we reached him and could not comment at length. 

This is at least the third AIG asset sell-off for Debevoise since the insurer took on about $180 billion in government bailout aid. The firm has previously advised on the sales of AIG's asset management unit to a consortium of private equity groups and AIG's Canadian life insurance unit to the Bank of Montreal, according to our previous reporting

Davis Polk & Wardwell reprised its role as the New York Fed's main adviser. The law firm was at the center of the global economic collapse as the Fed's lead adviser in several bailout deals, including AIG's original bailout. Partners John Amorosi and John Knight led the firm's team on the deal, according to the Debevoise team. (Davis Polk wouldn't comment on the matter.)

But wait! That's not all the dealing AIG has done this week. On Wednesday, the ailing insurer (sorry!) unloaded its Mexican consumer finance unit to local buyers for an undisclosed sum, according to The Wall Street Journal. The buyers are Desarrollo de Negocios Integrados SA and Inversiones DNI SA, two companies related to the larger groups Afirme Group Financiero and Consorcio Villacero, according to the NYT

Kramer Levin Naftalis & Frankel advised AIG on that deal, led by partner Howard Spilko. Spilko says he has been advising AIG on deal work for about a dozen years, a relationship that began because of his connections to one AIG in-house lawyer and has grown from there, he says. He could not comment on the specifics of the deal.

Fulbright & Jaworski represented the Mexican buyers along with local counsel, Spilko says. Fulbright partner Laura McMahon led the firm's team on the deal. She did not immediately return a call seeking comment.

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