Conseco Financial Files Chapter 11
Well, the shoe finally dropped. Conseco Financial Corp. (CFC), the company once known as Green Tree Financial Corp., has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
The bankruptcy filing by CFC and its affiliate, Conseco Finance Servicing Corp., is the third-largest in U.S. history. Only the WorldCom Inc. and Enron Corp. bankruptcies were larger, according to experts in the field.
CFC once was a significant source of RV dealer inventory finance, but it left the RV dealer floorplan business in September 2000. It also left the manufactured home dealer inventory finance business earlier this year.
CFC bought Green Tree in 1998. Green Tree first became involved in RV dealer inventory finance in 1996.
CFC is a unit of Carmel, Ind.-based Conseco Inc., which includes a significant insurance business that is not a part of the bankruptcy petition.
CFC filed for bankruptcy Wednesday (Dec. 18) and, at the same time, announced it had reached an agreement in principle to sell its assets and operations to a joint venture that includes Fortress Investment Group, J.C. Flowers & Co. and Cerberus Capital Management. The bankruptcy filing was intended to “facilitate the sale and to assist CFC in its efforts to restructure its manufactured housing servicing business,” according to CFC.