Bankruptcy Eyed for Conseco Finance

Conseco Inc., Carmel, Ind., has filed a statement with the Securities and Exchange Commission indicating that a bankruptcy filing is being considered for its St. Paul, Minn.-based Conseco Finance unit.When the company entered its current phase of operations in August, its former chief executive, Gary Wendt, said the problems were at the holding company level and not at its operating units. But the latest filing contradicts that. In the form 8-K filing made on Dec. 3, Conseco Finance announced that it did not make $4.7 million in guarantee payments on Dec. 2 related to manufactured housing securitization trusts. The company went on to state that Conseco Finance "presently intends to suspend all such guarantee payments relating to manufactured housing trusts until there is resolution to the restructuring of its manufactured housing business." The filing also said that "without additional liquidity in the near future, Conseco Finance will be unable to make those guarantee payments when they are required to be made." As a result of the announcement, Fitch Ratings cut its senior debt rating on Conseco Finance from CC to D, which stands for default. Conseco can be found on the Internet at http://www.conseco.com.