AIG Unit at Heart of Financial Crisis Finally Goes Bankrupt (1)

AIG Financial Products Corp., whose failed bets on subprime mortgages forced the US to bail out its parent American International Group Inc. in 2008, filed for bankruptcy Wednesday to fend off litigation from former employees claiming to be owed bonuses.

The unit listed assets of no more than $500 million against liabilities of as much as $50 billion in its bankruptcy petition. Almost all its debts now can be traced to the global financial crisis, when the company lost billions on credit default swaps tied to subprime mortgage bonds.

But the company is also fighting litigation from ...