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
When it filed its bankruptcy petition, Conseco's bankruptcy was the third-largest ever filed in the United States. It involved:
- Managing sub-prime lending operations during pending asset sale
- Reconciling 18,000 claims totaling more than $6.5 billion
- Analyzing over 2,000 potential preference actions totaling $74 million
- Liquidating all remaining assets.
Solution
As crisis manager, Bridge stabilized operations by enhancing the performance management process. Bridge was appointed Plan Administrator after the Plan was confirmed. In that role, Bridge utilized its Wind Down methodology and proprietary preference analysis software to analyze potential causes of action.
Results
Substantial assets were sold for $1.4 billion. After the sale, Bridge professionals assisted in significantly reducing $6.5 billion in filed claims. An initial distribution of $0.28 per $1 claim to the unsecured creditors was made within 11 months of plan confirmation. Post confirmation, Bridge assisted in recovering $75 million in preference recoveries and $22 million in tax refunds. Final recoveries are expected to exceed projections in the Plan of Reorganization.
