Thanks for that The Kin. I'm still disgusted that shareholders are not being diluted further. All it would have required is a couple of additional sentences, such as "The Federal Reserve will receive (warrants to purchase) senior preferred stock worth $1 billion, representing 80% of the company. The senior preferred stock will rank higher in priority to existing preferred stock and common stock"
As I understand it the immediate reason for bankruptcy isn't that they don't have net assets it's that they don't have net current assets. Although I guess without having a clear idea of what their liabilities and potential liabilities are one cannot say for certain how good a chance AIG has of surviving.