American International Group Inc. (NYSE:AIG) chairman Harvey Golub has abdicated his throne, leaving one of the insurer's key assets, Asian life unit American International Assurance Co. Ltd., unsold and taxpayers holding the bag as the U.S. government's massive rescue loan hangs over AIG's head.

AIG announced Golub's resignation and the appointment of director Robert Miller to his position. Golub's departure is the culmination of his months-long power struggle with AIG chief executive Robert Benmosche. Their tense relations came to a head in early June when against Benmosche's apparent wishes the board under Golub's leadership turned down London-based Prudential plc's (NYSE:PUK) request to cut the $35.5 billion sale price of AIA by $5 billion.

Golub leaves a company burdened with a government loan and holding onto one of the few assets that may have helped to whittle it away. No price cut meant no AIA sale, leaving AIG with little option other than revisiting plans to spin off the unit in an initial public offering on the Hong Kong Exchange. Instead of settling with a $30 billion AIA sale, this choosy beggar might walk away with $15 billion to $20 billion from an AIA offering, according to media reports.

Miller's ascension to the chairmanship could have two salutary effects. First, the move should quell resignation threats from the frequently displeased Benmosche. Second, and slightly more important, Miller's background suggests that he recognizes the importance of getting as much as possible from any transaction involving AIA.

Miller, chairman of private equity firm MidOcean Partners LLP, is a restructuring veteran. His most recent achievement: leading the restructuring of auto parts giant Delphi Corp., which exited bankruptcy as Delphi Holdings LLP in October 2009. He also took charge of the in-court restructuring of Federal-Mogul Corp. (NASDAQ:FDML), which exited a six-year stay in bankruptcy in 2008, and steered the restructuring of Bethlehem Steel Corp., which he took into Chapter 11 in 2001 and sold for $1.5 billion to Wilbur Ross' International Steel Group Inc. in 2003.

When AIG had accelerated plans for an AIA offering in early 2009 before Prudential's approach, market speculation suggested AIA would sell at least 25% of the business and raise between $4 billion and $10 billion depending on market conditions. While the capital markets' appetite for IPOs has improved from last year, an offering of this size is still no small task.