NEW YORK (Bloomberg) — American International Group Inc. chief executive officer Robert Benmosche last week threatened to resign unless the bailed-out insurer's chairman, Harvey Golub, leaves the firm, said two people with knowledge of the matter.

During a June 25 meeting of New York-based AIG's board, Benmosche, 66, demanded more control over the divestiture of the company's main Asia unit, including making top-level management changes, said the people, who declined to be identified because the talks were private. A deal Benmosche had supported to sell the business collapsed four weeks ago after Golub and other directors rejected a reduced bid.

"It's a boardroom battle of the highest order, a battle of big egos," said Phillip Phan, professor at the Johns Hopkins Carey Business School in Baltimore. "Benmosche's staked his reputation on this, and it's an issue if he feels he will be undermined because the board didn't back their CEO."

AIG's board made no decision at the meeting, and neither Benmosche nor Golub, the former CEO of American Express Co., announced they would resign, said the people. Benmosche's threat follows the failure of AIG's $35.5 billion deal to sell AIA Group Ltd. to Prudential Plc. The sale was part of AIG's efforts to repay the government for its $182.3 billion bailout.

Christina Pretto, an AIG spokeswoman, and Andrew Williams of the Treasury Department declined to comment. The US took an almost 80 percent stake in the firm after the September 2008 bailout. Golub, 71, didn't reply to a call seeking comment.

Benmosche is AIG's fifth CEO since 2005. His outburst caps a months-long struggle between the CEO and AIG's board. Earlier this year, AIG had planned an initial public offering of AIA until Benmosche, the former head of MetLife Inc., argued for an outright sale to London-based Prudential, saying it would yield more cash to repay the US, according to one of the people.