Conseco Finance spokeswoman: "Business as usual"

| 12/20/2002

A spokeswoman for Conseco Finance told Land Line Dec. 20 that truckers who have their loans through the company will likely see little if any change in their notes.

Conseco Inc. announced Dec. 17 it would file for protection under Chapter 11 bankruptcy laws. The filing - a "voluntary petition to reorganize" - is the third largest bankruptcy in U.S. history, according to media reports.

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.

"We've had several calls today," Gary Green of OOIDA's Business Services division said Dec. 18. The callers have asked how the Chapter 11 filing will affect their payments, and who to send their payments to.

Dana Coleman, a spokeswoman for Conseco Finance, said truckers should continue to make their payments as they have in the past, and send the payments to the same address.

"The gist of everything is, business as usual," Coleman said.

She said there was no way to predict whether loans would stay with Conseco. However, it is likely that most loans will continue to be held by Conseco Finance under its new ownership, she said, and will still have the same terms. But if the loans were sold to another company, truckers "absolutely will receive notification, most likely through the mail."

The story is much the same on the insurance side of the company: Most truckers who have their insurance through Conseco will see no change, and if there were a change, they would be notified, most likely through the mail.

Green said truckers should mail those 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.

"During 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 money.

"Right now, we're telling them to send your payments to whoever you're supposed to, as it was established, but do it by certified, registered mail," he said.

Green strongly 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.

"Even though you get confirmation numbers, whose going to retain those records," he said, "where are the records going?"

Green cautioned that truckers should not assume that because Conseco is in bankruptcy, they can skip their payments.

"Regardless 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 those payments."

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.

The assets 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 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.

The company 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 Press.

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.

Meanwhile, Coleman said truckers who have questions about the situation could get answers. For questions about Conseco Finance, call 1-800-335-1375. For questions about insurance through Conseco, call 1-800-525-0962.

--By Mark H. Reddig, associate editor