Tuesday, June 2, 2009

Citigroup reneges on severance contracts

Citigroup Inc. has told about five former top executives that it won't pay them tens of millions of dollars in promised severance payouts, according to people familiar with the matter...

Under the terms of exit agreements with the departed executives, Citigroup is contractually obliged to make the payments. But bank officials essentially are wagering that the former executives will conclude that it would be publicly embarrassing for them to file lawsuits against the struggling, taxpayer-backed company seeking the money.

Embarrassing? For a banker?

AIG couldn't adjust all the contracts with it's counterparties because of the "sanctity of contracts."

Obviously, just a bunch of sanctimonious talk, when you now have the embarrassment defence.

So if the "embarrassed" bankers file a lawsuit for their money, they get it!

Now bankers have a price on embarrassment.

It's $28.8 million!

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