announced Dec. 17 it would file for protection under Chapter 11
- a "voluntary petition to reorganize" - is the third
largest bankruptcy in U.S. history, according to media reports.
In a release
Dec. 18, the Carmel, IN-based company said the filing included only
some of its subsidiaries, including several related to its finance
operations. Conseco's insurance companies are separate legal entities
and are not included in the filing.
and operations of Conseco Finance, which is based in St. Paul, MN,
will be purchased by CFN Investment Holdings, a joint venture of
Fortress Investment Group, J.C. Flowers & Co. and Cerberus Capital
Management. However, CFN will have the option of leaving some of
Conseco Finance's assets out of the sale.
The case hit
close to home for a number of truckdrivers who have their rigs financed
through Conseco. Many of those drivers are wondering how recent
events will affect them.
had several calls today," Gary Green of OOIDA's Business Services
division told Land Line. The callers have asked how the Chapter
11 filing will affect their payments, and who to send their payments
to. While all the answers aren't available yet, Green does have
a few suggestions.
of whether these guys are going bankrupt, you have to make your
truck payments," Green said. "You can't stop making them
because they are bankrupt. You've got to protect yourself by making
truckers should mail their payments in a way that provides proof
of delivery so they are protected if the finance company loses any
payments or records during the switch to a new owner.
this transition period they should be sure and do any payments by
certified, registered mail, and get return receipts requested,"
Green said. The return receipt will provide truckers with proof
the payment has been delivered. Otherwise, Green said, truckers
could face problems if the company says they did not receive the
now, we're telling them to send your payments to whoever you're
supposed to, as it was established, but do it certified, registered
mail," he said.
discouraged truckers from doing phone payments - even if they are
encouraged by the company to do so - particularly because it provides
no paper proof the payment arrived on time.
though you get confirmation numbers, you can't be sure who's going
to retain those records, where are the records going," Green
at Conseco Finance did not return calls from Land Line by
The case is
now before Bankruptcy Judge Carol A. Doyle in Chicago, Dow Jones
Newswire reported. James H.M. Sprayregen, the company's lead attorney,
told the judge Dec. 18 that Conseco expected to emerge from bankruptcy
by the second quarter of next year.
owed creditors $6.5 billion related to acquisitions during the 1990s,
including one that gave the firm the largest collection of mobile-home
loans in the country, according to a report from The Associated
Not all of
Conseco's creditors have given the green light to the restructuring
plan, a company spokesman told Reuters news service. However,
the plan has not yet been finalized.
H. Reddig, associate editor