"We are stabilizing AIG's liquidity so that we do not need support beyond those amounts that the government has already authorized," Liddy states, according to prepared testimony for Wednesday morning's hearing before the House Oversight & Government Reform Committee. "Although as I have said before the state of the economy will be a factor."
The optimistic forecast is just one of four areas in which Liddy touts "substantial progress" made as part of the company's ongoing restructuring.
"We have reduced, but not yet eliminated, the systemic risk that AIG presents to the global system," he says. "We are selling assets and businesses, despite adverse conditions in global financial markets."
"We are restructuring some businesses for public offerings, for later disposition, or to be wound down so that future losses can be mitigated or avoided," he states.
Liddy notes that the company continues to wind down the complex derivatives portfolio at the Financial Products unit, which almost single-handedly drove the company into the ground with risky credit-default swaps. The exposure has now dropped from $2.7 trillion to $1.5 trillion.
When the CEO first testified before the House panel on March 18, lawmakers grilled him for over five hours about the company's controversial payment of $165 million in employee retention payments earlier that month. Before taking the witness stand again on Wednesday, Liddy reminds lawmakers of the government's massive stake in AIG.
"It is critical that we not lose sight of the fact that we are partners," he says. "When the employees of AIG make mistakes, we expect to be criticized. But rampant, unwarranted criticism of AIG serves only to diminish the value of our businesses around the world - to the detriment of our shareholders, including taxpayers, who own some 80 percent of AIG."
"Our plan is explicitly designed to avoid having to divest AIG assets at fire-sale prices," notes Liddy. "In fact, just the opposite is true. We intend for taxpayers to realize the fullest possible value from every asset disposition."
Meanwhile, the group responsible for overseeing the American taxpayers' 80 percent stake in AIG wants new board members at the company and a broad review of compensation policies.
The AIG Credit Facility Trust, an independent three-person group established by the Federal Reserve Bank of New York in January to manage and dispose of the government's voting stock of AIG, will also testify at Wednesday's hearing.
"We are actively seeking new members of the board who could add important skills and perspectives," they write in their prepared testimony, noting that they hope to make an announcement "shortly."
The trustees also demand that by the end of the year Liddy produce a new compensation plan in "a thoughtful, prudent, and fair manner."
In a letter to Liddy dated May 7, they wrote, "We recognize that crafting such a comprehensive plan will be a significant challenge in light of the constraints under which AIG must operate. In spite of the challenges, it is essential that a comprehensive plan be developed by year-end."