During a rainstorm in Washington in early 2009, amid the furor over Wall Street's post-bailout bonuses, an American International Group employee pulled out an umbrella that had the insurer's name on it.

Somebody came by, grabbed the umbrella and broke it, said AIG Chief Executive Robert Benmosche, who added that the attacker told the employee to engage in a sexual act impossible to perform on oneself.

The anger over AIG's $182.3 billion taxpayer-funded bailout was palpable across the United States. Concerned that its employees faced potential physical violence beyond destroyed umbrellas, the company changed its identity cards in the spring of 2009, replacing its familiar logo with a design that left off the company's name.

Benmosche said when he took over as CEO in August 2009 he was struck by the fear among AIG's employees. Financially, the company was in a free-fall. AIG lost about $100 billion in 2008, including $62 billion in the largest quarterly loss in corporate history. In late 2008, the company opened its doors to buyers in a desperate attempt to sell its far-flung businesses, but the effort quickly fell apart due to low-ball bids and lack of financing.

AIG has come a long way since then, rebounding far faster and more dramatically than nearly anyone inside or outside the company expected.

As a result, the U.S. Treasury Department, which will own more than 90 percent of the company, is likely to hold two large stock sales next year and aims to offload the rest in 2012, a source familiar with the situation said. In the first stock issue, perhaps as soon as March, Treasury could sell about one-fifth of the insurer in a $10 billion-plus offering.

A big profit from the AIG rescue and the government's eventual disentanglement ahead of U.S. elections in 2012 would be a boost for the Obama administration, coming on the heels of similar successes at Citigroup Inc and General Motors .

But this remarkable reversal of fortune has taken a tortuous path, and the way ahead is not without risks.

For one thing, Benmosche, in whom AIG's roughly 100,000 employees found a leader when all hope seemed lost, is battling cancer. For another, Chartis and SunAmerica Financial -- the general insurance and domestic life subsidiaries that form the core of what's left of the company -- face significant operational and competitive challenges.

Interviews with more than a dozen people involved in the restructuring -- on all sides of the endeavor -- reveal new details about the behind-the-scenes maneuvering, setbacks, debates and conflicts over the past year as AIG struggled to free itself of government support.

Politics, personality clashes, controversial incentives and intense debates over strategy at first complicated the turnaround but also ultimately accelerated it, these interviews revealed.

The company itself became a battleground. A rift between management and some members of the board that festered for nearly a year eventually forced former Chairman Harvey Golub to leave. He resigned on July 14.

AIG and its federal overlords also sparred. Over the summer, the government became frustrated with the company, complaining that AIG was taking its support for granted when the board pulled the plug on a huge asset sale.

And there were arguments within the government itself, as the Treasury Department and the U.S. Federal Reserve negotiated how much risk each of them would retain as the bailout unwinds.

Despite these complications, though, the plan for the insurer to extricate itself from government ownership came together relatively quickly on September 30, just four months after a key $35.5 billion asset sale to Britain's Prudential
fell through, surprising critics as well as some of those involved in the process.

Insiders say the toughest parts of the restructuring are behind them and expect the path from here to be smooth, barring any unforeseen external shocks like a natural disaster that results in a big loss at Chartis.

Indeed, some key players are already moving on. Sarah Dahlgren, who led the New York Fed's AIG team, left in the summer to become head of bank supervision at the regional central bank, where she will be joined by Steven Manzari, another senior New York Fed official.

Dahlgren said she already missed the challenges, the raging debates we had about things we wanted to do or didn't want to do. It required a lot of pushing, debating and getting your point straight.

Ruth Porat, a Morgan Stanley banker advising the government, took over as the Wall Street firm's CFO earlier this year. And Jim Millstein, the Treasury's main official on AIG, is looking at potential new assignments as the exit plan is completed.

For all the positive signs, however, no one is unfurling the mission accomplished banner. Given the unpredictable path the restructuring has taken, caution may well be warranted.