AIG delays payments to some real-estate ventures

American International Group (AIG.N) has cut or delayed payments to some of its real-estate ventures, reported the Wall Street Journal citing people familiar with the issue.

It was revealed that the insurer had stopped progressing payments to Alabama shopping-center developer Alex Baker. As a result some 15 banks have fallen under the risk of exposure to soured loans. However, AIG has offered a settlement which most probably will not be accepted by the lenders.

Affiliates of Mitchell L Morgan Management Inc., another developer, had sued AIG in February for missed and delayed payments. Nevertheless, as spokeswoman for AIG told the Journal, AIG and Morgan had agreed on suspending the litigation for 60 days in order to negotiate a possible settlement. 

The paper has also disclosed that AIG Global Real Estate, an arm of the insurance company, had interests exceeding $23 billion across 53 million square feet of real estate.

Due to the $180 billion in bailout funds into the company, spending at AIG is being monitored closely by the Federal Reserve.