From 1996 to 2000, former Conseco CEO Stephen Hilbert borrowed more than $175 million in loans guaranteed by Conseco to purchase the company's stock. When the company entered bankruptcy in 2000, Hilbert's stock was almost worthless and with mounting interest, his loans totaled more than $200 million. Based in Carmel, Indiana, Conseco has since restructured, but Hilbert's giant loan balance remains and the company is seeking to recover its money.
Hilbert claims he doesn't owe a dime. He maintains that a change-of-control provision in his loan document essentially cancels his debt. Kirkland partner Reed Oslan is representing Conseco in the litigation and dismisses Hilbert's claims, saying "There was no change of control, period." Meanwhile, Hilbert has transferred more than $100 million in assets to his wife and children, in an attempt to conceal his resources. Oslan said Conseco fully intends to remain vigilant in its attempt to recover all assets available to Hilbert, using private investigators to locate his assets, moving to foreclose on his home, and filing a lawsuit naming his young children as defendants.
This article appeared in its entirety in the December 5, 2003 edition of The Wall Street Journal [Page A1].