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Sarbanes-Oxley News & Developments
Conseco Seeks Foresclosure on Home of Ex-CEOConseco seeks foreclosure toward recovering $217 million they say Hilbert owes.
> > Conseco Inc., is seeking foreclosure of a $19.4 million mortgage to go toward recovering $217 million the company says former CEO Stephen Hilbert owes. Talks to settle the loan and interest debt out of court have bogged down, leading Conseco to collect money through litigation, said Reed Oslan of Kirkland & Ellis, the Chicago law firm Conseco hired to handle its Chapter 11 bankruptcy.
Conseco filed the lawsuit on Monday and is seeking $62 million in interests payments from loans Hilbert took out to buy Conseco stock in a company-sponsered program of a type now barred under federal law.
Conseco also is seeking repayment of $155 million for the underlying loans through counterclaims, in response to a lawsuit filed by Hilbert on Sept. 15. He filed the complaint while simultaneously seeking a settlement.
In addition to targeting the home of Hilbert, Conseco attorneys are seeking to invalidate alledged transfers of money they contend Hilbert made to his wife and others to avoid repayment obligations.
Hilbert was forced to resign as CEO in April 2000 after piling up a $8.2 billion in debt through acquisitions, including the $6 billion purchase in 1998 of the former Green Tree Financial Group. That deal saddled Conseco with a foreclosure-riddled mobile home portfolio. Hilbert resigned along with his chief financial officier amid allegations that they failed to disclose key information about Green Tree.
Hilbery left with a severance package that included $72.4 million in cash, security service at his home and the right to use company corporate jets up to 20 times a year.
Share price for Conseco reached $58 in 1998 amid a company-sponsered program that allowed directors, officers and other key employees to buy stock through loans guarnteed by Conseco. Such programs are now prohibited under the Sarbanes-Oxley Act of 2002.
Source: Hoovers
Published:2003-10-21
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