Answering the Call to Help Bail Out AIG

(Bloomberg Opinion) -- What do you do when a phone call comes out of the blue asking you to restructure the giant failed insurer American International Group Inc.? If you are James Millstein, this week’s guest on Masters in Business, you ignore the big pay cut and answer the call.

Millstein’s job as chief restructuring officer at the U.S. Treasury Department proved to be a historic opportunity too fascinating to pass up. Millstein stayed until the overhaul was completed in 2011.

His day job is co-chairman of Guggenheim Securities. He (and/or his firm) has had a ringside seat to some of the biggest restructurings in history (besides AIG), including cable operator Charter Communications, General Motor Co. and Chrysler, US Airways, Greece, and Puerto Rico.

Millstein warns that we could be at the leading edge of a new wave of restructurings, due to the big increase in financial engineering of corporate debt in the era of near-zero interest rates and share buybacks.

His favorite books are here; the transcript of our conversation is here.

You can stream/download the full conversation, including the podcast extras, on iTunesBloombergOvercast and Stitcher. Our earlier podcasts can all be found at iTunesStitcherOvercast and Bloomberg.

Next week, we speak with Robert Cialdini, professor emeritus of psychology and marketing at Arizona State University. He is the author of the book “Influence: The Psychology of Persuasion” which has sold 3 million copies in 30 languages. His new book is “Pre-Suasion: A Revolutionary Way to Influence and Persuade.”

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.”

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