Ex-CEO of Conseco may lose house

The former chief executive of Conseco Inc. (IRL team sponsor – AJ Foyt IV) and his family trusts must pay $62.7 million plus interest to a Conseco subsidiary, which also can foreclose on his mansion, a judge has ruled. Steve Hilbert, who co-founded Conseco in 1979, owed that much in interest on $162 million that he and his family trusts borrowed to purchase stock of Conseco, an insurance holding company based in the Indianapolis suburb of Carmel. Hamilton County Judge Judith Proffitt issued the order Wednesday instead of sending the case to a jury. Hilbert, who stepped down in April 2000, said in a news release that his lawyers will appeal. The insurer last year filed lawsuits seeking to recover about $670 million in stock loans from Hilbert and 10 other former directors and officers. The loans, which were used to buy Conseco stock, are now prohibited by federal law. If the judgment stands, Hilbert's 25,000-square-foot French-style Carmel mansion also would be auctioned off in a sheriff's sale. The subsidiary, Conseco Services, holds one of the home's mortgages for $19.4 million. The company, saddled with $6.5 billion in debts incurred mainly through 1990s acquisitions, filed for Chapter 11 bankruptcy protection in 2002 and came out of bankruptcy in September 2003 with a much-reduced debt load. The bankruptcy filing was the third-largest in U.S. history, trailing only the filings of WorldCom Inc. and Enron Corp. During its bankruptcy, Conseco excused the debt owed by nearly 300 employees, but it promised to pursue Hilbert and 10 other directors and officers for their debts. The so-called Big 11 owed more than $700 million combined in debt and interest. Cleveland Plain Dealer

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