(Reuters) - American International Group (AIG.N) has cut or delayed payments to some of its real-estate ventures, potentially leaving the developers and their bankers in the lurch, the Wall Street Journal reported.
The paper, citing people familiar with the matter, said the insurer had halted payments to Alabama shopping-center developer Alex Baker, putting some 15 banks at risk of exposure to soured loans.
AIG has offered a settlement but a person close to the banks said the lenders were unlikely to accept, the Journal said.
Affiliates of another developer, Mitchell L Morgan Management Inc, sued AIG in February for missed and delayed payments.
A spokeswoman for AIG told the Journal that AIG and Morgan have agreed to suspend litigation for 60 days to negotiate a possible settlement but believes Morgan’s complaint is without merit.
AIG Global Real Estate, an arm of the insurance company, has interests totaling more than $23 billion across 53 million square feet of real estate, the Journal said.
Spending at AIG is being monitored closely by the Federal Reserve after the U.S. government committed $180 billion in bailout funds to what was once the world’s largest insurer.
AIG, AIG Baker and Morgan were not immediately available for comment.
Reporting by Vikram Subhedar in Bangalore; editing by John Stonestreet