Former American International Group Inc. Chairman Maurice Hank Greenberg is continuing to make the case that, “AIG had a liquidity problem, not a solvency problem,” and that it needs more time to sell its assets.

Greenberg defended that position today at the annual conference of the Captive Insurance Council of the District of Columbia, Washington.

Greenberg also continued to make the case that the problems at AIG, New York, began after he was forced out of the company.

AIG “went wild,” and, after being downgraded, “they just ran out of cash” for collateral on the credit default swaps sold by the company’s financial products unit, Greenberg said.

The declining value of the swaps ultimately led the federal government to bail out the company Sept. 17.

But other AIG operations are worth more than the current market prices would suggest, Greenberg contends.

Greenberg appeared at the captives council conference through a video transmission from his home in New York.

Greenberg left AIG under pressure from then New York Attorney General Eliot Spitzer in 2005. Since then, the company has had 3 chief executive officers and has suffered through the collapse of the swaps unit.

Greenberg said during the conference that he was making the video appearance partly because he wanted to be sure to be around today.

Greenberg has said in the past few weeks that he believes AIG could have done better without federal aid, and that the company’s problems were the result of trends that started after he left the company.

Today he stuck with those positions as AIG discussed the federal rescue package and the events leading up to the rescue in a Form 10-Q quarterly report filed with the U.S. Securities and Exchange Commission.

AIG reported $24 billion in losses this morning.

The company also reported that the federal government has agreed to replace a 2-year, $85 billion credit facility arranged in September and later financing arrangements with a 5-year, $60 billion credit facility and the purchase of $40 billion in preferred shares through the Troubled Asset Relief Program.

The original deal called for AIG to pay an annual interest rate equal to 8.5 percentage points plus the 3-month U.S. London Interbank Offered Rate on cash borrowed from the credit facility, along with an annual fee of 8.5% on undrawn credit facility capacity.

The new deal cuts the credit facility interest rate to LIBOR plus 3 percentage points, and the annual fee on undrawn credit facility capacity to 0.75%.

The revised deal is much better than the earlier deal, because the earlier deal was made under “terms that were strangling the company,” Greenberg said. “They essentially nationalized the company.”

Interest payments made under the original terms would have totaled about $27 billion over 2 years, and no company could have survived that requirement, Greenberg said.

AIG is supposed to sell assets to pay back the government. The company would have a hard time selling assets under current conditions at anything other than garage sale prices, but the revised deal “should buy AIG some time,” Greenberg said.

“Sometime after about 3 years,” AIG should be able to get a fair value for subsidiaries, Greenberg predicted.

Greenberg said his concerns about AIG are not about him.

“My concern is and always has been about the thousands of employees who’ve lost their life savings,” he said. “When I left the company, they had a market value of $170 billion.”

Today, the market value is just $5 billion, and the New York state employees’ pension system alone has lost $1.2 billion to $1.3 billion, Greenberg said.

“What was management doing?” Greenberg asked. “I’m angry. Obviously, I’m angry.”

Greenberg also alluded to Spitzer, without referring to him by name.

Some of the problems at AIG were caused “by an aggressive attorney general who was seeking to become governor and who tried to take down the biggest names he could find,” Greenberg said.

“A lot needs to be looked at in our justice system, or ‘injustice system,’” Greenberg said.