Big Suits: Conseco Bankruptcy
Winning a bronze medal is great—unless, of course, it’s WorldCom, Inc., and Enron Corp. that have taken the gold and silver. On December 17, 2002, insurance giant Conseco, Inc., filed the third-largest Chapter 11 bankruptcy petition in U.S. history, as measured by the holding company’s assets (roughly $52 billion, counting both its filing and nonfiling subsidiaries). Conseco’s liabilities total roughly $51 billion, according to its filing. Along with the holding company, many of Conseco’s financial services subsidiaries also filed for Chapter 11, including Conseco Finance Corp., the St. Paul-based mobile home lender.
Conseco has reported massive losses since its 1998 acquisition of Conseco Finance Corp.’s precursor, Green Tree Financial Corp. On January 31, Conseco filed a Plan of Reorganization and disclosure statement with Chicago bankruptcy court. Under the plan the debt of the company’s bondholders will be converted to equity, and the banks will receive senior debt and junior securities in the reorganized company.
In-House: Executive vice president, general counsel, and secretary David Herzog.
Bankruptcy: Anne Marrs Huber, Anup Sathy, James Sprayregen, Richard Wynne, and associates Shirley Cho, Roger Higgins, Ross Kwasteniet, Dryden Liddle, and William Springer.
Fried, Frank, Harris, Shriver & Jacobson (New York):
Bankruptcy: Brad Scheler, of counsel, Alan Resnick, and associates David Cohen, Katie Hughes, John McGuinness, Vivek Melwani, Brian Pfeiffer, Arik Preis, Jennifer Rodburg, and Alon Ziv.
Corporate: Paul Falon, David Golay, and associates Evan Pilchik and Andrew Silberstein.
Litigation: Bonnie Steingart and special counsel John Brewer.
Tax: Jack Jacobson and associate Eli Weiss.
Executive compensation and employee benefits: Donald Carleen and associate Adam Scoll.
Scheler represented Conseco’s largest creditors in prior transactions.
Bankruptcy: Thomas Kiriakos, counsel Craig Reimer, and associate Alex Montz.
Corporate: John Schmidt.
Davis Polk & Wardell (New York):
Corporate: Donald Bernstein, Karin Day, Karen Wagner, Charles Whitmann III, and associates Sandip Bhattacharji, Sartaj Gill, D. Justin Griffith, Anne Kobayashi, and Holly Strutt.
Litigation: associate Benjamin Kaminetzky. Davis Polk has a long-standing relationship with Bank of America.
Saul Ewing (Philadelphia):
Bankruptcy: Irving Walker and special counsel Donald Detweiler.
Litigation: Timothy Callahan II and John Stoviak. (Walker is located in Baltimore; Detweiler is in Wilmington.) United Capital Markets, Inc., and other debt holders approached the firm for its expertise in representing such committees.
Bankruptcy: Daniel Murray, John Sieger, and Catherine Steege.
Becker & Poliakoff (Fort Lauderdale):
Bankruptcy: Jason Burnett, Kenneth Jacobs, Ivan Reich, and of counsel Gary Blum.
Litigation: Gary Rosen.
(Burnett and Jacobs are located in Jacksonville.)
The auction for the sale of Conseco Finance is scheduled for March. Conseco’s insurance subsidiaries are running business as usual.
