Human Capital & Careers

Conseco Settles with Former CFO

The insurer had loaned $108 million to its onetime finance chief to buy company stock, but those shares became worthless when the company filed for...
Stephen TaubMarch 14, 2005

Conseco Inc. has settled its lawsuit against former chief financial officer Rollin M. Dick stemming from loans made to buy company stock before the insurer filed for bankruptcy, according to the Associated Press.

The terms of the deal were not disclosed, the wire service noted.

During the market boom in the 1990s, a number of companies made large loans to top executives, who used the money to buy more company stock, with the presumption that they would use a portion of the quick profits to repay the loans.

Conseco had loaned $108 million to its former CFO to buy company stock, but those shares became worthless when the company filed for bankruptcy in December 2002. Conseco emerged from Chapter 11 in September 2003, added the AP.

The civil trial, which had been scheduled for April 11, concerned nearly $30 million in interest owed by Dick to the company, according to the wire service. The former finance executive’s attorneys, however, argued that Dick owed little or no money since control of Conseco had changed since he left the company in 2000 and because the loan program is now illegal, according to the AP.

Altogether, Conseco has sued 11 former officers and directors over its loan program; this is the fourth settlement.

Former chief executive officer Stephen Hilbert owed more than $200 million in loans and interest, according to the AP. As part of his settlement, Hilbert relinquished his 23,000-square-foot mansion and was ordered to pay $72 million. But last month, the wire service added, he agreed to auction his household possessions as a condition for receiving a stay of the court decision that ordered him to pay that sum while he appeals the ruling.

In February, former chief operating officer Donald F. Gongaware, who reportedly owed nearly $36 million, agreed to surrender his $4.1 million estate.

And last year, Conseco settled with former president and chief operating officer Thomas J. Kilian, who owed $26.8 million, and with former Conseco Finance executive Bruce A. Crittenden, who reportedly owed $8.1 million, according to the AP.