Conseco Finance Corporation

Client

Conseco Finance Corporation, a sub-prime lender and servicer of mortgage portfolios with more than $25 billion in outstanding loans and securitizations.

Challenge

The third-largest bankruptcy ever filed in the United States at the time it was filed. The engagement involved: (1) managing operations during a pending §363 sale of substantially all of Conseco’s assets; (2) reconciling 18,000 claims totaling more than $6.5 billion; (3) analyzing approximately 2,100 potential preference actions; and (4) liquidating all remaining assets.

Solution

Bridge assembled a two person team to act as the Debtor’s bankruptcy advisor, reporting directly to the interim CEO. Bridge facilitated the pending §363 sale by stabilizing the Debtor’s operations through evaluating and improving upon the Debtor’s cash management process, reviewing and assisting in the streamlining of its operations and servicing of its existing portfolio of manufactured housing and home equity loans and by evaluating and improving the management of the foreclosure and remediation process. Bridge was also appointed as the post-confirmation Plan Administrator. Bridge utilized its creditor recovery methodology and proprietary preference analysis software to analyze, prosecute and/or mediate potential avoidance causes of action. Working closely with the re-organized Debtor, Bridge also p prosecuted and resolved substantial litigations in a variety of states brought by the borrowers of loans originated by the Debtor. Bridge professionals assisted in significantly reducing $6.5 billion in filed claims and in recovering $75M in preference payments and $22M in tax refunds.

Results

Substantial all the Debtor’s assets were sold for $1.4 billion After the sale, Bridge professionals assisted in significantly reducing $6.5 billion in filed claims. Final distributions to the unsecured creditors of approximately $0.40 per $1.00 claim were made within 11 months of plan confirmation.