Conseco has signed a commitment letter to sell some of its assets to Lehman Brothers Bank and affiliates. Pursuant to this transaction, Lehman Brothers will purchase approximately $1.5 billion in loans from Conseco Finance, with up to $500 million of the proceeds available to repay inter-company indebtedness owed to Conseco.
Under heavy investor pressure, Conseco Inc.’s two top executives resigned their posts last month. Chairman Stephen C. Hilbert and Chief Financial Officer Rollin M. Dick made the announcement April 27, saying Conseco’s market-value plummet over the last two years has impaired investor confidence in the pair. Conseco executives David V. Harkins and Thomas H. Lee have been chosen as interim chairman and CFO. The company will begin searching for permanent replacements immediately. The company’s first-quarter results showed operating earnings dropped to 30 cents per diluted share to $107 million, with net cash from operations of $315.7 million.
Two stockholders have filed a class-action suit in an Indiana U.S. District Court alleging Conseco executives intentionally misled investors.
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