Conseco Throws in the Towel

Having failed to shore up its floundering finance businesses and reeling under its $6.5 billion in debt, Conseco filed for Chapter 11 on Dec. 11. With $52 billion in assets, Conseco is the third-largest bankruptcy ever, topped only by WorldCom and Enron. The bankruptcy is a final blow to the reputation of Gary Wendt, who quit on Oct. 3. The ex-CEO of General Electric Capital was brought in to rescue Conseco in June, 2000, with a $45 million signing bonus. He got a further $8 million bonus in July, 2002, a month before Conseco defaulted on its debt. The company says that its insurance units are not part of the filing and that policyholders will not be affected. Finance operations such as the risky mobile-home loan portfolio will be sold off during the restructuring. What is likely to emerge will be a life- and health-insurance company with an investment arm.