Conseco, Conseco Finance File for Ch. 11

Conseco Inc., Carmel, Ind., and its subsidiary, Conseco Finance Corp., St. Paul, Minn., have filed separate petitions for Chapter 11 protection in the Federal Bankruptcy Court for the Northern District of Illinois.As part of the filings, Conseco Finance announced it has reached an agreement in principle to be acquired by CFN Investment Holdings LLC, a joint venture of Fortress Investment Group LLC, J.C. Flowers & Co. LLC, and Cerberus Capital Management LP. The proposed purchase price would equal the amount of Conseco Finance's secured debt as of the deal's closing date, subject to adjustment. Conseco Finance has obtained $125 million in debtor-in-possession financing from an affiliate of the buyer and one of its existing lenders. While the parent company had been in debt problems for some time, the likelihood of bankruptcy at Conseco Finance only became apparent when it announced that it had not made $4.7 million in guarantee payments on Dec. 2 related to manufactured housing securitization trusts.