================================================================= CONSECO BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2002 (ISSN XXXX-XXXX) December 18, 2002 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- CONSECO BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtor's cases. New issues are prepared by Geoff J. Bailey, Frauline Sinson-Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of CONSECO BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO CONSECO BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF THE CONSECO ENTERPRISE [00002] CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2002 [00003] CONSECO INC.'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] CFC'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING & SALE [00005] CONSECO DEBTORS' CHAPTER 11 DATABASE [00006] LIST OF CONSECO INC.'S 30-LARGEST UNSECURED CREDITORS [00007] LIST OF CONSECO FINANCE'S 40-LARGEST UNSECURED CREDITORS [00008] ORGANIZATIONAL MEETING WITH US TRUSTEE TO FORM COMMITTEES [00009] STANDARD & POOR'S AFFIRMS INSURANCE SUBSIDIARIES' RATINGS KEY DATE CALENDAR ----------------- 12/17/02 Voluntary Petition Date 01/01/03 Deadline for filing Schedules of Assets and Liabilities 01/01/03 Deadline for filing Statement of Financial Affairs 01/01/03 Deadline for filing Lists of Leases and Contracts 01/06/03 Deadline to provide Utilities with adequate assurance 02/15/03 Deadline to make decisions about lease dispositions 03/17/03 Deadline to remove actions pursuant to F.R.B.P. 9027 04/16/03 Expiration of Debtors' Exclusive Plan Proposal Period 06/15/03 Expiration of Debtors' Exclusive Solicitation Period 12/16/04 Deadline for Debtors' Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Deadline for Filing Proofs of Claim against Holding Co. Deadline for Filing Proofs of Claim against CFC Debtors First Meeting of Creditors pursuant to 11 USC Sec. 341 REFERENCE NOTES --------------- "Conseco" or "the Holding Company Debtors" refers, collectively, to Conseco, Inc., and CIHC, Incorporated, CTIHC, Inc., and Partners Health Group, Inc. "CFC," "Conseco Finance" or "the CFC Debtors" refers, collectively, to Conseco Finance Corp. and Conseco Finance Servicing Corp. "The Debtors" refers, collectively, to the Company as a whole and all of the chapter 11 estates. ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO CONSECO BANKRUPTCY NEWS ----------------------------------------------------------------- CONSECO BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of CONSECO BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving CONSECO BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. Currently, we provide similar coverage about the restructuring proceedings involving Reliance Group Holdings & Reliance Financial, National Century Financial Enterprises, The FINOVA Group, Inc., Comdisco, United Airlines, US Airways Group, Budget Group, ANC Rental, Genuity, WorldCom, Global Crossing and Asia Global Crossing, Adelphia Communications and Adelphia Business Solutions, Winstar, 360networks, Exodus Communications, Lernout & Hauspie and Dictaphone, GenTek, Federal-Mogul, Hayes Lemmerz, Exide Technologies, W.R. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) CONSECO BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of CONSECO BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF THE CONSECO ENTERPRISE ----------------------------------------------------------------- Conseco, Inc. 11825 N. Pennsylvania St. Carmel, IN 46032 Telephone (317) 817-6100 Fax (317) 817-2847 http://www.conseco.com Conseco Finance Corp. 345 St. Peter St. 1100 Landmark Towers St. Paul, Minnesota 55102 Telephone (651) 293-3400 CONSECO, INC., is a financial services holding company with subsidiaries operating in two lines of business: __________ | Conseco's insurance subsidiaries develop, market and | administer supplemental health insurance, annuities, Insurance | individual life and other insurance products. | __________| Conseco is the 28th largest life and health insurance company based on total admitted assets. The Company's investment portfolio included more than $22 billion of insurance-related investments at September 30, 2002. Conseco's career agency force sells primarily Medicare Supplement and long- term care insurance policies, senior life insurance and annuities. These agents sell only Conseco policies and typically visit the customer's home which permits one-on-one contacts with potential policyholders and promotes strong personal relationships with existing policyholders. The Company's independent producer distribution channel consists of a general agency and insurance brokerage distribution system comprised of independent licensed agents doing business in all fifty states, the District of Columbia, and certain protectorates of the United States. Independent producers are a diverse network of independent agents, insurance brokers and marketing organizations. Conseco's direct marketing distribution channel is engaged primarily in the sale of "graded benefit life" insurance policies which are sold directly from the Company to the policyholder: * Supplemental health products include Medicare supplement, long-term care and specified-disease insurance products, collecting: Year Ending 9 Months Ended Dec. 31, 2001 Sept. 30, 2002 -------------- --------------- Medicare supplement premiums $975,100,000 $759,000,000 Long-term care premiums 888,300,000 680,400,000 Specified-disease premiums 371,800,000 276,400,000 Other health premiums 109,300,000 78,600,000 * Annuity products include equity-indexed annuity, variable annuity, traditional fixed rate annuity and market value- adjusted annuity products, generating: Year Ending 9 Months Ended Dec. 31, 2001 Sept. 30, 2002 -------------- --------------- Annuity premiums $1,637,900,000 $804,100,000 * Life products include traditional, universal life and other life insurance products, generating: Year Ending 9 Months Ended Dec. 31, 2001 Sept. 30, 2002 -------------- --------------- Life product premiums $872,200,000 $483,900,000 The Insurance Subsidiaries are regulated by various state regulatory agencies. The Commissioner of Insurance for the State of Texas, at the present time, is acting as the lead state regulatory agency on behalf of the other states. In late October, 2002, Banker's National Life Insurance Company and Conseco Life insurance Company of Texas entered into an agreement with the Texas Insurance Commissioner providing that: (1) the Holding Company Debtors can receive dividends and distributions from the Insurance Subsidiaries after January 1, 2003, only if the Texas Commissioner approves those payments; (2) the Insurance Subsidiaries must maintain sufficient capitalization and reserves for insurance corporations under applicable state law; and (3) the Texas Commissioner must approve disbursements outside the ordinary course of business. __________ | Consenco Finance is a large consumer finance company, | with roughly $41 billion of managed finance Finance | receivables as of Sept. 30, 2002. Conseco Finance is | the largest originator of manufactured housing loans __________| (based on total securitizations of manufactured housing loans) and the Company also originates home equity mortgages, home improvement loans, and private label credit cards. Conseco Finance provides financing for consumer purchases of manufactured housing and floor plan loans to manufactured housing dealers. A manufactured home is a structure, transportable in one or more sections, designed to be a dwelling with or without a permanent foundation. Conseco Finance offers its manufactured housing financing products through 33 regional offices and approximately 3,200 dealers. Conseco Finance offers mortgage services products, including home equity and home improvement loans. Private label credit card programs are offered to select retailers with a core focus on the home improvement industry. Conseco Finance offers consumer finance products through 123 home equity offices, approximately 1,300 home improvement dealers and approximately 3,500 private label retail outlets. Conseco Finance originated loans for: Year Ending 9 Months Ended Dec. 31, 2001 Sept. 30, 2002 -------------- --------------- Manufactured housing contracts $2,499,500,000 $936,700,000 Mortgage services products 3,043,700,000 2,060,100,000 Retail credit 3,585,800,000 2,520,500,000 Floorplan 2,101,500,000 452,200,000 Conseco Finance's portfolio of managed loans contained: Year Ending 9 Months Ended Dec. 31, 2001 Sept. 30, 2002 --------------- --------------- Manufactured housing contracts $25,575,100,000 $24,822,400,000 Mortgage services products 11,815,400,000 11,064,800,000 Retail credit 2,695,100,000 2,723,000,000 Consumer finance 1,450,000,000 1,267,200,000 Floorplan 930,400,000 550,000,000 Discontinued lines of business 500,300,000 320,500,000 Conseco's workforce consists of: 4,000 employees working for the Insurance Subsidiaries; 5,400 employees working for the Finance Subsidiaries; and 475 employees working for the corporate shared services. ----------------------------------------------------------------- [00002] CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2002 ----------------------------------------------------------------- CONSECO, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET At September 30, 2002 ASSETS Investments: Actively managed fixed maturities at fair value (amortized cost: 2002 - $19,481,600,000)............. $19,785,400,000 Retained interests in securitization trusts at fair value (amortized cost: 2002 - $526,000,000) 526,000,000 Equity securities at fair value (cost: 2002 - $156,200,000)......... 139,100,000 Mortgage loans......................... 1,281,300,000 Policy loans........................... 538,800,000 Venture capital investment in AT&T Wireless Services, Inc. (cost: 2002 - $14,200,000).......... 17,700,000 Other invested assets.................. 337,900,000 --------------- Total investments.................. 22,626,200,000 Cash and cash equivalents: Held by the parent company............. 109,400,000 Held by subsidiaries................... 1,498,800,000 Accrued investment income................. 653,700,000 Finance receivables....................... 2,572,300,000 Finance receivables - securitized......... 13,947,700,000 Cost of policies purchased................ 1,220,900,000 Cost of policies produced................. 2,050,500,000 Reinsurance receivables................... 957,300,000 Income tax assets......................... 79,800,000 Goodwill.................................. 100,000,000 Assets held in separate accounts and investment trust....................... 704,700,000 Cash held in segregated accounts for investors.............................. 432,400,000 Cash held in segregated accounts related to servicing agreements and securitization transactions............ 1,197,200,000 Assets of discontinued operations......... 2,542,500,000 Other assets.............................. 1,592,200,000 --------------- Total assets....................... $52,285,600,000 =============== LIABILITIES AND SHAREHOLDERS' DEFICIT Liabilities: Liabilities for insurance and asset accumulation products: Interest-sensitive products.......... $13,944,600,000 Traditional products................. 7,826,000,000 Claims payable and other policyholder funds................ 933,900,000 Liabilities related to separate accounts and investment trust..... 704,700,000 Liabilities related to certificates of deposit........... 2,124,100,000 Investor payables...................... 432,400,000 Guarantee liability related to interests in securitization trusts held by others...................... 198,600,000 Other liabilities...................... 1,977,200,000 Liabilities of discontinued operations................................ 2,458,800,000 Investment borrowings.................. 843,100,000 Notes payable: Direct corporate obligations......... 4,016,700,000 Direct finance obligations: Master repurchase agreements................................ 465,800,000 Credit facility collateralized by retained interests in securitizations................. 512,300,000 Other borrowings................... 76,400,000 Related to securitized finance receivables structured as collateralized borrowings......... 14,662,900,000 --------------- Total liabilities................ 51,177,500,000 --------------- Minority interest: Company-obligated mandatorily redeemable preferred securities of subsidiary trusts................... 1,919,900,000 Shareholders' equity (deficit): Preferred stock........................ 501,700,000 Common stock and additional paid-in capital (no par value, 1,000,000,000 shares authorized, shares issued and outstanding: 346,007,133............ 3,497,300,000 Accumulated other comprehensive income. 130,400,000 Retained earnings (deficit)............ (4,941,200,000) --------------- Total shareholders' deficit...... (811,800,000) --------------- Total liabilities and shareholders' deficit......... $52,285,600,000 =============== ----------------------------------------------------------------- [00003] CONSECO INC.'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Conseco, Inc. Reaches Agreement in Principle on Restructuring with Banks and Bondholders * Files Voluntary Petitions to Reorganize Under Chapter 11 * Insurance Operations Not Included in Filing * Conseco Finance Corp. Reaches Agreement in Principle to Sell Assets Through Separate Chapter 11 Filing INDIANAPOLIS, Indiana -- December 18, 2002 - Conseco, Inc. (OTCBB:CNCE) announced today that it has reached an agreement in principle with representatives of its banks and bondholders on a financial restructuring of the Company's capital that would substantially reduce the Company's debt. To facilitate the restructuring, the Company and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company emphasized that the filing includes only certain holding companies, certain non-operating subsidiaries and certain entities related to Conseco Finance Corp., the Company's finance subsidiary. Conseco's insurance companies, Conseco Services, LLC and Conseco Capital Management are separate legal entities and are not included in the filing. President and Chief Executive Officer William J. Shea stated, "We believe we have achieved a major step toward what we set out to do in August. We have reached an agreement in principle with the bank and bondholder representatives to reduce the company's leverage to a level that, together with our targeted operating performance, will support the efforts by the Company's insurance subsidiaries to reclaim an "excellent" financial strength rating from A.M. Best following the restructuring." Shea further emphasized that the agreement in principle with the bank and bondholder representatives should significantly expedite the restructuring process. While negotiating with its major creditor constituents, the Company has worked closely with state insurance regulators. The Company believes the insurance subsidiaries are adequately capitalized, and that policyholders will not be affected by the parent company restructuring. Shea further stated, "Our business leaders have done an outstanding job during this difficult period. We continue to drive our businesses for improved results, both at the top and bottom line. We have terrific franchises with outstanding people. We intend to do everything we can to maximize their potential." "While we recognize the hardship that has been placed on our employees and many of our constituencies during this period, we believe we have made the hard decisions necessary to position Conseco for future success." The petitions were filed in the U.S. Bankruptcy Court for the Northern District of Illinois. Details regarding the filing can be obtained at http://www.bmccorp.net/conseco Conseco Finance Corp. Concurrently with the Company's announcement, Conseco Finance Corp. (CFC) announced that it has reached an agreement in principle with CFN Investment Holdings LLC, a joint venture of Fortress Investment Group LLC, J.C. Flowers & Co. LLC, and Cerberus Capital Management, L.P., providing for the sale of Conseco Finance Corp.'s assets and operations. Under the proposed agreement, CFN Investment Holdings would acquire all of Conseco Finance Corp.'s assets and operations, subject to various closing conditions and CFN Investment Holdings' option to exclude certain assets. The proposed purchase price would be equal to the outstanding amount of CFC's secured debt as of the closing date, subject to adjustment. To facilitate the sale and to assist CFC in its efforts to restructure its Manufactured Housing servicing business, CFC and Conseco Finance Servicing Corp. filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Mill Creek Bank, Green Tree Retail Services Bank and Conseco Agency were not included in the Chapter 11 filing. CFC has issued a separate news release detailing these actions. ----------------------------------------------------------------- [00004] CFC'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING & SALE - ---------------------------------------------------------------- Conseco Finance Corp. Reaches Agreement in Principle to Sell Company's Assets to CFN Investment Holdings LLC, a Joint Venture of Fortress Investment Group LLC, J.C. Flowers & Co., LLC, and Cerberus Capital Management, L.P. * Proposed Sale to Be Completed Through Voluntary Chapter 11 Proceedings; * Conseco Finance Corp.'s Operations Expected to Continue Without Interruption Pending Completion of Sale Process ST. PAUL, Minnesota -- December 18, 2002 -- Conseco Finance Corp. (CFC) announced today that it has reached an agreement in principle with CFN Investment Holdings LLC, a joint venture of Fortress Investment Group LLC, J.C. Flowers & Co., LLC, and Cerberus Capital Management, L.P., providing for the sale of CFC's assets and operations. Under the proposed agreement, CFN Investment Holdings would acquire all of Conseco Finance Corp.'s assets and operations, subject to various closing conditions and CFN Investment Holdings' option to exclude certain assets. The proposed purchase price would be equal to the outstanding amount of CFC's secured debt as of the closing date, subject to adjustment. To facilitate the sale and to assist CFC in its efforts to restructure its Manufactured Housing servicing business, CFC and Conseco Finance Servicing Corp. filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Mill Creek Bank, Green Tree Retail Services Bank and Conseco Agency were not included in the Chapter 11 filing. In conjunction with the Chapter 11 filing, and as required under Section 363 of the Bankruptcy Code, Conseco Finance Corp. will file a motion seeking to establish bidding procedures for an auction that will allow other qualified bidders to submit higher and better offers to purchase the company's assets. The company anticipates that the proposed sale will be completed in the first quarter of 2003, pending approval of the Bankruptcy Court and certain government regulatory agencies. "The expected sale of these assets to a well-capitalized buyer is positive news for Conseco Finance," said Chuck Cremens, President and CEO of Conseco Finance Corp. "We believe that the sale of the business will preserve the vast majority of our employees' jobs and enhance our ability to serve our customers," Cremens added. CFC also announced that it has reached an agreement in principle with an affiliate of the buyer and one of CFC's existing lenders to provide up to $125 million of DIP financing. Upon execution of definitive agreements and Bankruptcy Court approval, the DIP financing should provide the company with sufficient funding to continue to operate its business and serve its customers without interruption during the Chapter 11 process. Pending final approval of the DIP financing by the Court, CFC's secured lenders have agreed to allow CFC to use cash collateral to fund its ongoing operations. As a routine matter, ongoing employee compensation and benefit programs are being presented to the Court for approval as part of the company's "first-day" motions, and the company anticipates that the Court will approve these requests, thereby ensuring that employees will be paid and that benefit programs will remain intact. Vendors will be paid in the ordinary course for all goods furnished and services rendered after the filing. CFC and Conseco Finance Servicing Corp. filed their voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Northern District of Illinois. Conseco, Inc., CFC's parent, also announced today that it and certain of its non-operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 with that Court. Conseco Finance Corp., with managed assets of $38 billion, is one of America's largest finance companies. Conseco Finance Corp. is a subsidiary of Conseco, Inc., which is headquartered in suburban Indianapolis. ----------------------------------------------------------------- [00005] CONSECO DEBTORS' CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor entities filing separate chapter 11 petitions: Case No. Debtor -------- ------ 02-49671 Partners Health Group, Inc. 02-49672 Conseco, Inc. 02-49673 CTIHC, Inc. 02-49674 CIHC, Incorporated 02-49675 Conseco Finance Corp. 02-49676 Conseco Finance Servicing Corp. Chapter 11 Petition Date: December 17, 2002 Bankruptcy Court: United States Bankruptcy Court Northern District of Illinois Eastern Division 219 South Dearborn Chicago, Illinois 60604 Telephone (312) 435-5694 Fax (312) 408-7750 Bankruptcy Judge: The Honorable Carol A. Doyle Debtors' Bankruptcy Counsel: James H.M. Sprayregen, Esq. Anne Marrs Huber, Esq. Anup Sathy, Esq. Stephanie D. Simon, Esq. Timothy D. Elliott, Esq. KIRKLAND & ELLIS AON Center 200 East Randolph Drive Chicago, Illinois 60601 Telephone (312) 861-2000 Fax (312) 861-2200 - and - Richard L. Wynne, Esq. KIRKLAND & ELLIS 777 South Figueroa Street Los Angeles, California 90017 Telephone (213) 680-8400 Fax (213) 680-8500 Debtors' Financial Advisor: Frank A. Savage LAZARD FRERES & CO. 30 Rockefeller Plaza New York, NY 10020 Telephone (212) 632-6000 Debtors' Strategic Advisor: CREDIT SUISSE FIRST BOSTON CORPORATION CFC Debtors' Interim Managers: Anthony H.N. Schnelling David Phelps Carl Young Jean FitzSimon BRIDGE ASSOCIATES, LLC 747 Third Avenue, Suite 20A New York, New York 10017 Telephone (800) 838-6966 CFC Debtors' Special Counsel: Bruce J. Shnider, Esq. Michael E. Reeslund, Esq. Charles F. Sawyer, Esq. DORSEY & WHITNEY LLP 50 South Sixth Street, Suite 1500 Minneapolis, Minnesota 55402-1498 Telephone (612) 340-2862 Debtors' Special SEC Litigation Counsel: James R. Doty, Esq. James E. Rocap, III, Esq. Stacy Paxon, Esq. BAKER BOTTS L.L.P. The Warner 1299 Pennsylvania Ave., NW Washington, DC 20004-2400 Telephone (202) 639-7700 Fax (202) 639-7890 Debtors' Special Litigation Counsel: Gregory P. Joseph, Esq. Pamela Jarvis, Esq. Honey L. Kober, Esq. GREGORY P. JOSEPH LAW OFFICES LLC 805 Third Avenue, 31st Floor New York, NY 10022 Holding Company Debtors' Special Corporate Counsel: James M. Carr, Esq. BAKER & DANIELS 300 N. Meridian Street, Suite 2700 Indianapolis, IN 46204 Debtors' Accountants: John J. Quinn PRICEWATERHOUSECOOPERS LLP 300 North Meridian Street, Suite 1700 Indianapolis, IN 46204-1767 Telephone (317) 453-4100 Holding Company Debtors' Actuaries: Bruce W. Winterhof MILLIMAN USA, INC. Two Conway Park 150 Field Drive, Suite 180 Lake Forest, IL 60045 Telephone (312) 726-0677 Fax (847) 604-8671 Debtors' Claims Agent: Sean Allen Tinamarie Feil BANKRUPTCY MANAGEMENT CORPORATION 6096 Upland Terrace South Seattle, WA 98118 Telephone (206) 725-5405 Fax (206) 374-2727 Debtors' Corporate Communication Consultants: Michael S. Sitrick Ann Julsen Jeff Lloyd SITRICK & COMPANY, INC. 1840 Century Park East, Suite 800 Los Angeles, California 90067 Telephone (310) 788-2850 U.S. Trustee: Ira Bodenstein Constantine Harvalis Sandra Rasnak United States Trustee for Region 11 227 West Monroe St., Suite 3350 Chicago, Illinois 60606 Telephone (312) 886-5785 Fax (312) 886-5794 ----------------------------------------------------------------- [00006] LIST OF CONSECO INC.'S 30-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Pursuant to Rule 1007 of the Federal Rules of Bankruptcy Procedure, Conseco, Inc., and CIHC, Incorporated, disclose the identities of their 30-largest unsecured creditors who are not insiders, as of December 9, 2002: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Bank of America National Bank Debt $1,493,275,217 Trust and Savings Assoc. 231 South LaSalle Street Chicago, IL 60697 Attn: Bridget Garavalia Telephone (312) 828-1259 Fax (312) 828-6269 State Street Bank 8.70% Trust $500,000,000 Corporate Trust Division Preferred 225 Asylum Street Securities Hartford, CT 06103 Attn: Michael Hopkins Telephone (860) 244-1820 Fax (860) 244-1889 HSBC Bank USA 8.75% Senior Notes $423,706,000 Issuer Services 452 5th Avenue New York, NY 10018-2706 Attn: Robert Conrad Telephone (212) 525-1314 State Street Bank 9.0% Guaranteed $399,200,000 Senior Notes State Street Bank 8.75% Guaranteed $364,294,000 Senior Notes State Street Bank 10.75% Guaranteed $362,433,000 Senior Notes State Street Bank 8.70% Trust $325,000,000 Preferred Securities State Street Bank 8.796% Trust $300,000,000 Preferred Securities State Street Bank 9.44% Trust $300,000,000 Preferred Securities State Street Bank 9.16% Trust $275,000,000 Preferred Securities HSBC Bank USA 6.4% Senior Notes $234,064,000 State Street Bank 9.00% Trust $230,000,000 Preferred Securities HSBC Bank USA 8.5% Senior Notes $224,905,000 Bank of America, N.A. Director and $200,054,938 Officer Loan HSBC Bank USA 9.0% Senior Notes $150,800,000 State Street Bank 6.8% Guaranteed $150,783,000 Senior Notes The Chase Manhattan Bank Director and $141,551,144 270 Park Avenue Officer Loan New York, NY 10017 Attn: Helen Newcomb Telephone (212) 270-6260 Fax (212) 270-1511 Bank of America, N.A. Director and $129,812,258 Officer Loan HSBC Bank USA 6.8% Senior Notes $99,217,000 HSBC Bank USA 10.75% Senior Notes $37,567,000 State Street Bank 6.4% Guaranteed $14,936,000 Senior Notes Bank of America, N.A. Director and $9,856,737 Officer Loan State Street Bank 8.5% Guaranteed $991,000 Senior Notes Banc One 7% Feline Prides $67,000 Corporate Trust Services One Bank One Plaza Suite IL 1-0126 Chicago, IL 60670-0216 Attn: Mark J. Frye Telephone (312) 407-8810 Fax (312) 407-1708 ----------------------------------------------------------------- [00007] LIST OF CONSECO FINANCE'S 40-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Pursuant to Rule 1007 of the Federal Rules of Bankruptcy Procedure, Conseco Finance Corp. and Conseco Finance Servicing Corp., disclose the identities of their 40-largest unsecured creditors who are not insiders, as of December 9, 2002: Entity Nature Of Claim Claim Amount ------ --------------- ------------ U.S. Trust, N.A. 180 East 5th St., 2nd Floor Guarantee Payments $8,036,158 St. Paul, MN 55101 on Asset Attn: Tamara Schulty-Pugh Securitization Bonds Telephone (651) 244-0011 Fax (651) 244-0089 ALLTEL Information Services, Judgment $6,742,258 Inc. 4001 Rodney Parham Rd. Little Rock, AR 72212 Attn: Michael Gravelle Telephone (501) 220-7070 Fax (501) 220-4034 Menards Merchant Incentive $1,171,006 4777 Menard Drive Program Eau Claire, WI 54703 Attn: Jeff Sacla Telephone (715) 876-2428 Fax (715) 876-2743 U.S. Bank, N.A. Trustee Fees $304,684 180 Fifth St., 2nd Floor St. Paul, MN 55101 Attn: Tamara Schulty-Pugh Telephone (651) 244-0011 Fax (651) 244-0089 ZC Sterling Trade Debt $236,244 210 Interstate N. Pkwy Suite 400 Atlanta, GA 30339 Attn: Bob Davis Telephone (770) 690-8400 Fax (770) 690-8240 American Express Corp. Trade Debt $213,666 P.O. Box 0001 Chicago, IL 60679 Attn: Brent Muntz Telephone (623) 492-7269 Fax (623) 492-5339 Corporate Express National Trade Debt $208,238 P.O. Box 71217 Chicago, IL 60694 Attn: Richard Toppin Telephone (651) 638-8801 Fax (651) 638-8855 Airborne Express Trade Debt $204,968 P.O. Box 91001 Seattle, WA 98111 Attn: Eric DeWitt Telephone (800) 247-2676 Fax (317) 487-5751 Sharp Electronics Finance Trade Debt $130,952 P.O. Box 642333 Pittsburgh, PA 15264 Attn: Mike Torticilli Telephone (800) 789-5203 Fax (319) 841-6324 Sotiroff & Abramczyk, P.C. Professional Fees $126,139 30400 Telegraph, Suite 444 Bingham Farms, MI 48025 Attn: Barb Jester Telephone (248) 642-6000 Extension 206 Fax (248) 642-9001 Select Comfort Corporation Trade Debt $120,225 6105 Trenton Lane North Plymouth, MN 55442 Attn: Jim Raabe Telephone (763) 551-7428 Fax (763) 551-7826 Syntel Inc. Trade Debt $116,094 525 East Big Beaver Suite 300 Troy, MI 48083 Attn: Reghu Neelakanthun Telephone (248) 619-3546 Fax (248) 619-2891 Standard & Poor's Rating Trade Debt $100,500 Services 2542 Collection Center Dr. Chicago, IL 60693 Attn: Michael Sherifan Telephone (800) 767-1896 Extension 4 Fax (212) 438-5178 Imake Consulting Trade Debt $99,950 6700 Rockledge Drive Suite 101A Bethesda, MD 20817 Attn: Trami Tran Telephone (301) 896-9200 Fax (301) 897-2016 Iron Mountain, Inc. Trade Debt $95,738 P.O. Box 60709 Los Angeles, CA 90060 Attn: Doug Huffman Telephone (952) 888-3852 Fax (952) 888-8445 PRG Schultz International Trade Debt $68,951 P.O. Box 100101 Atlanta, GA 30384 Attn: Jim Baker Telephone (949) 234-2200 Fax (949) 487-0125 NCP Solutions, Inc. Trade Debt $64,115 P.O. Box 830876 Birmingham, AL 35283 Attn: Steve Greenwalt Telephone (205) 421-7000 Fax (205) 849-6926 Comdisco/CNS Trade Debt $62,772 7145 Collection Center Chicago, IL 60693 Attn: Linda Terrin Telephone (847) 518-7924 Fax (847) 518-5060 Repossessors, Inc. Trade Debt $60,262 10939 89th Avenue North Minneapolis, MN 55369 Attn: Larry Lobe Telephone (763)493-4951 Extention 236 Fax (763) 493-4974 Getsmart.com, Inc. Trade Debt $59,712 P.O. Box 193824 San Francisco, CA 94119 Attn: Sue Singh Telephone (415) 644-5211 Fax (415) 644-4944 Hewlett-Packard Trade Debt $58,974 P.O. Box 75629 Charlotte, NC 28275 Attn: Loretta Clayton Telephone (800) 209-9260 Extension 56524 Fax (404) 648-8201 De Lage Landen Financial Trade Debt $57,400 Services P.O. Box 41601 Philadelphia, PA 19101 Attn: Jane Condi Telephone (800) 736-0220 Extension 5434 Fax (800) 442-2086 U.S. Property & Appraisal Trade Debt $54,936 P.O. Box 16490 Pittsburgh, PA 15242 Attn: Jim Messineo Telephone (412) 220-8400 Extension 1811 Fax (412) 220-8443 Orion Marketing Group, Inc. Trade Debt $53,303 1200 Network Blvd. Building A, Suite 105 San Antonio, TX 78249 Attn: Eulonda Jackson Telephone (210) 690-4114 Fax (210) 690-9215 Datacomp Trade Debt $52,314 3215 Eaglecrest Drive N.E. Grand Rapids, MI 49525 Attn: Renie Smith Telephone (800) 365-1415 Fax (800) 841-8062 Asset One Marketing Group Trade Debt $51,469 600 17th Street, No. 1610S Denver, CO 80202 Attn: Heather Preston Telephone (303) 285-9094 Fax (303) 285-0523 David J. Stern, P.A. Trade Debt $50,260 801 S. University Drive Suite 500 Plantation, FL 33324 Parego, Inc. Trade Debt $47,815 Pitney Bowes Management Trade Debt $46,395 Deutsche Financial Services Trade Debt $45,050 RDI Marketing Services, Inc. Trade Debt $44,245 Brandt Fisher Alward & Roy PC Trade Debt $42,574 Secured Legal Services Group Trade Debt $41,656 Wingate Carpet Mills Trade Debt $38,375 Kenney & Solomon, P.C. Trade Debt $36,883 Ambassadors Performance Trade Debt $36,623 Pierce & Associates, P.C. Trade Debt $36,104 Promotional Alliance Trade Debt $35,582 Windsor Building, L.L.C. Trade Debt $35,573 Mortgage Specialists, Inc. Trade Debt $35,088 ----------------------------------------------------------------- [00008] ORGANIZATIONAL MEETING WITH US TRUSTEE TO FORM COMMITTEES ----------------------------------------------------------------- Ira Bodenstein, the United States Trustee for Region XI, will contact each of Conseco's 30-largest unsecured creditors and each of Conseco Finance's 40-largest unsecured creditors to invite them to an organizational meeting for the purpose of forming one or more official committees of unsecured creditors. To determine the time, date and place for that meeting, contact the U.S. Trustee's office at (312) 886-5785. Creditors interested in serving on the Committee should complete and return a statement indicating their willingness to serve on an official committee. A copy of the U.S. Trustee's form for this purpose is available at: http://www.usdoj.gov/ust/r11/credform.pdf Official creditors' committees, constituted under 11 U.S.C. Sec. 1102, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In Chicago, larger committees are common. In Kmart's chapter 11 case, the U.S. Trustee was persuaded to appoint two creditors' committees -- one to represent the interests of trade creditors and one to represent the interests of institutional creditors. In the United Airlines, National Steel and Comdisco reorganizations, one committee represents each of those debtors' unsecured creditor constituencies. It's logical to assume that the U.S. Trustee will appoint one committee to represent Conseco creditors and one to represent Conseco Finance creditors. An ad hoc committee of Conseco noteholders has been actively involved in negotiations with the Company for months. Fried, Frank, Harris, Shriver & Jacobson serves as the ad hoc committee's as legal advisor and Houlihan Lokey Howard & Zukin provides financial advisory services. It's logical to assume that the ad hoc committee will lobby to be appointed as the official committee. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Additional information about the role of a creditors' committee is available from the U.S. Trustee at http://www.usdoj.gov/ust/r11/unsecured_creditors_ira_memo.htm Immediately following the U.S. Trustee's determinations about how many official committees will be appointed and who will be appointed to each committee, the newly formed committees convene their initial meeting. The first order of business is to listen to the U.S. Trustee explain the powers and duties of the committee as a whole and members' individual responsibilities. The Committee will generally elect a chairman. Thereafter, the Committee typically conducts beauty pageants to select their legal and financial advisors. ----------------------------------------------------------------- [00009] STANDARD & POOR'S AFFIRMS INSURANCE SUBSIDIARIES' RATINGS ----------------------------------------------------------------- NEW YORK, New York -- December 18, 2002 -- Standard & Poor's Ratings Services said today that it removed from CreditWatch and affirmed its 'B+' financial strength ratings on Conseco Inc.'s insurance subsidiaries follow Conseco's announcement that it has filed for Chapter 11 bankruptcy protection. The outlook on these companies is negative. Standard & Poor's also said that it affirmed its 'D' ratings on Conseco. The insurance operations are not included in Conseco's bankruptcy filing. Standard & Poor's had already revised its debt ratings on Conseco to 'D' in October 2002 based on the belief that the resignation of the CEO, Gary Wendt, was a prelude to a bankruptcy filing. The financial strength ratings on the insurance entities had been placed on CreditWatch with negative implications on Aug. 9, 2002, following the downgrade of Conseco because there was not enough clarity about the impact of the parent company's travails on the insurance operations. "Today's action reflects the belief that though the parent has filed for bankruptcy, the policyholders of the insurance companies are well protected by the respective insurance departments," explained Standard & Poor's credit analyst Jay U. Dhru. All the insurance companies of the Conseco group are subject to consent orders from the Texas Insurance Department that, among other things, restrict the ability of the insurance subsidiaries to pay dividends and other amounts to the parent company. Although the Insurance Department is working closely with the life companies, those companies are not under regulatory supervision. "Standard & Poor's believes though the policyholders are protected by the Insurance Department, Conseco's bankruptcy filing will continue to hamper the insurance operations," Dhru added. "The ratings on the insurance operations will need to be reassessed if the parent company emerges from its expected bankruptcy filing." Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com All ratings affected by this rating action can be found on Standard & Poor's public Web site at http://www.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions. *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: Professor Stuart Gilson's newest title, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." List Price: $79.95 -- Discounted to $55.96 at http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt -------------------------------------------------------------------------