Unsubscribe easily. The company went on an acquisition binge, taking on a huge debt load that is now the basis of its plight. Federal law allows you to withdraw as much cash as you want from your bank accounts. Conseco's troubles began two years ago, in what some say was a foreshadowing of Enron and other celebrated collapses. P. 50(b); Martin H. Redish, 9 Moore's Federal Practice 50.41 (3d ed.2003). The present scenario is clearly distinguishable. In 1987, it added Western National Life Insurance to its portfolio at a cost of $262 million. 'This is what I love to do,' Hilbert proclaimed in the June 7, 1993, issue of the Indianapolis Business Journal. You already receive all suggested Justia Opinion Summary Newsletters. But my net worth's in Conseco. Another of North American's witnesses, Perry Schatz, testified only five percent of Conseco's leads result in a funded loan. Accordingly, North American concludes that there was insufficient evidence, absent proof of net profit, for any submissible cause of action to survive and requests that we overturn the jury verdict as a matter of law and enter judgment in North American's favor. In 1998, Conseco bought Green Tree Financial Corp., Minneapolis, which became Conseco Finance, for $6 billion. So, we purchased a mobile home in 1997 and it was financed through Greentree Financial. Kientzy v. McDonnell Douglas Corp., 990 F.2d 1051, 1061 (8th Cir. Conseco is a Delaware financial services company with its principal place of business in Minnesota. Typically, the lender issues a "notice of release" when that happens, and the lien is taken off the books, and the trust deed may be returned to you. Although it increased the value of its holdings to more than $4 billion in 1988, Conseco was able to reduce its workforce by almost ten percent. 966, 968 (E.D. Entering the mid-1990s, Conseco was poised for continued growth. Sys. In order to recover damages for unfair competition, Conseco was required to prove 1) the existence of a trade secret, 2) the communication of the trade secret to another, while that former employee was in a position of trust and confidence with Conseco, and 3) the use of the trade secret that damaged Conseco. Conseco, in its "First Amended Complaint," added two additional counts-participation in breach of fiduciary duty, and a separate count for injunctive relief. These documents contained information concerning Conseco's internal operations, including monthly retail point income reports generated by each Conseco office, reports ranking the retail volume by branch, reports of retail loans funded by region, financial summaries of each branch, expense ratio reports, expense analysis reports, expense analysis retail volume variance reports, and reports on credit insurance protection. Are you trapped in your home by your low mortgage rate? Specifically, North American argues that its conduct was not outrageous and did not justify the award, that there was no corporate wrongdoing by North American, and that the punitive damages were an improper remedy for its discovery abuses.10. Hopefully this was not just a dealer transaction and went thru a Title/Escrow. Who bought out Conseco Finance Servicing Corp? North American senior manager, Ken Keeler, provided rebuttal expert testimony, stating that the average-net profit on a loan was $2,100.4 Carrie Hiatt, a North American witness, further testified that approximately ten percent of certain Conseco leads resulted in funded loans. One caveat to this rule is that some banks will charge an early account closure fee if you close an account soon after opening it. Shearson Lehman Brothers advised Lincoln Income Life Insurance. PRIVACY NOTICE: When you visit this website we collect your browsing activities on our site and use that information to analyze and research improvements to the website, and to our products and services. They may or may not get the point. By the end of the year the company's asset base had increased to $102 million. Podner's wholesale copying of customer loan files, which coincided with his resignation from Conseco and hiring by North American, creates at least the threat of misappropriation. FTC's website on credit. During the same period, the value of Conseco's assets ballooned from $11.8 billion to $16.6 billion--a gain of about 30 percent. In arguing that the lead sheets are not "trade secrets," North American principally relies on Vigoro Indus., Inc. v. Cleveland Chem. The contents of this site may not be republished, reprinted, rewritten or recirculated without written permission. In order to avoid this constitutional infirmity, the punitive damages award must be remitted to $7 million, an amount that is sufficiently punitive, but that does not violate notions of fundamental fairness. Consequently, he was employed by both companies during this two week period. BMW of North America, Inc. v. Gore, 517 U.S. 559, 575, 116 S. Ct. 1589, 134 L. Ed. who bought out conseco finance servicing corp Before PNC ARCS, Mr. Vela was Vice President for National Community Financing for Conseco Finance Corp, and its predecessor Green Tree Financial Corp, both on the New York Stock Exchange. Most persuasively, North American contends that the "exacting" nature and quality of proof needed for recovery of lost profits in Missouri required Conseco to prove net profits by introducing evidence "of the cost and expense of operating the business during these periods." They pointed to the company's relatively low net worth, which was equal to only two percent of its total assets in 1991. If specificity is lacking, judgment as a matter of law may neither be granted by the district court nor upheld on appeal unless such a result is "`required to prevent manifest injustice.'" Conseco Inc., Carmel, Indianapolis, has sold its finance subsidiary, Conseco Finance Corp., in a Chapter 11 sale that culminated March 5 in a winning bid of $1 billion. Therefore, in 1990 Hilbert organized Conseco Capital Partners (CCP), a limited partnership that included several well-financed companies. Create an alert to follow a developing story, keep current on a competitor, or monitor industry news. Bet you are. We affirm in part and reverse in part. Conseco announced recently that it filed its Joint Plan of Reorganization and Disclosure Statement with the Bankruptcy Court. However, North American also introduced several new legal theories-related to damages-not distinctly articulated in its "Directed Verdict Motion." Whenever your loan is sold, you get a letter from the new servicer notifying you of the change. Conseco Finance became insolvent after it failed to make a $4.7 million payment that was due Dec. 4. Co. v. Haslip, 499 U.S. 1, 23-24, 111 S. Ct. 1032, 113 L. Ed. North American competes for individuals in the same market. Such challenges must be sufficiently specific so as to apprise the district court of the grounds relied on in support of the motion. North American competes for individuals in the same market. The district court upheld each of the awards, noting that North American's conduct was "widespread and systematic" and "reprehensible," and that the award was "not an injustice, but rather appropriate in light of the evidence." Andrey is a coach, sports writer and editor. In fact, it experienced stellar growth during 1992 and 1993. And, interestingly, much of the improper activity occurred after Conseco filed suit, further reflecting the reprehensibility of North American's actions. The deal proved disastrous after mobile home loan defaults and delinquencies piled up as the economy soured. Id. In viewing this evidence in the light most favorable to the verdict, we hold there is ample evidence supporting each element of an unfair competition claim. GE Consumer Finance, a unit of General Electric Company, with $77 billion in assets, is a leading provider of credit services to consumers, retailers and auto dealers in 36 countries around the world. Who bought out Green Tree Financial? - IronSet Conseco Finance Unit to Be Split, Sold - Midland Daily News 1996). The court rejected this argument noting that this was a geographic area where everyone knows everyone else, "and you simply need to `see and ask'" to identify customers. At the end of 1996 Conseco made two more acquisitions--American Travellers Corp. for $880 million and Transport Holdings, Inc., for $228 million. According to Missouri law, a "trade secret" is information-including but not limited to-technical or nontechnical data, a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. Mark S. Wasinger and John B. Morthland of Hannibal, MO appeared on the brief. 1994), aff'd in relevant part, 82 F.3d 785 (8th Cir. Thank you, you have successfully subscribed to our newsletter! US Bank may even accept the Final HUD-1 from 2003 as proof it was paid off. Conseco was investing tens of millions of dollars into new entertainment-related projects late in 1993 and 1994, including some riverboat gambling proposals. [7] for $31 per share in cash but the merger could not be consummated as the Kentucky Department of Insurance raised objections to certain expenses which Lincoln would have incurred in the merger. Co. v. Campbell, 538 U.S. 408, 419, 123 S. Ct. 1513, 155 L. Ed. Id. In 1992, just ten years after starting his business, Hilbert was one of the highest paid executives in the United States. Satisfied with its recipe for acquiring and improving insurance companies, Conseco stepped up its acquisition efforts in 1986. Conseco also filed a motion seeking a preliminary injunction and a permanent injunction to prevent the "raiding" of its employees. ", Conseco organizes these lead sheets according to color-the most promising are colored red, leads that are considered good are colored white, and merely decent leads are colored blue. In 2000, over the course of several months, a substantial number of Conseco's office managers and loan originators resigned, and many of Conseco's former employees took jobs working for North American. The plan is the. It's hard to . Although Podner claims he made these copies in order to help a fellow employee make the transition to loan originator, Conseco provided evidence that would allow a reasonable finder of fact to determine that a threat of misappropriation existed with regard to these specific files. Counsel who presented argument on behalf of the appellee was David G. Wasinger of St. Louis, MO. 1997). Its goals for 1994 included increasing its assets under management by 30 percent. Upon emergence from Chapter 11, Conseco will be engaged exclusively in the insurance business, the company says. You sign a promissory note that you'll pay it back per the agreed schedule, and the lender secures the loan with a Deed of Trust that's filed at the courthouse. Meridian Enters. Conseco Finance Corp. will be split up and sold for a total of about $1 billion. Podner testified that the number was substantial. Earlier, in mid-1985, Lincoln had agreed to be acquired by I.C.H. Sign up for our free summaries and get the latest delivered directly to you. North American argues that the award is based solely on its net worth and is so excessive that it violates due process. Co., 866 F. Supp. 1971) (stating that it is "generally held that an agent's malice is imputable to the corporation making the latter liable for malicious, willful or criminal torts of its agents or employees within the scope of their employment"). As stated so eloquently-and simply-by Judge Posner of our sister circuit, "punitive damages should be proportional to the wrongfulness of the defendant's actions." This handbook states that "non-public information about customers, dealers, and others is strictly confidential.". Innovative Beginnings in the Late 1970s and Early 1980s, Stephen C. Hilbert founded the company and guided its meteoric rise. The problems started in 1998 when the company bought Greentree Financial, a mobile and manufactured housing lender, in 1998. In response, Conseco sent a copy of Mambretti's letter to North American with a request that North American "cease and desist" from taking and using information contained in Conseco's loan files. We have been trying that with US Bank now for 6 months, they aren't doing anything about it becuase our sitaution is unique, we are trying to refinance to pay off another US Bank property, so to them it isn't urgent so they can keep getting both mortgage payments, which is what sucks. Andrey knows everything from warm-up to hard workout. GE Consumer Finance Reaches Deal to Acquire Conseco Finance Corp.'s 'We are going to stay away from food and beverage.' [6] SNI bought Consolidated National Life Insurance Co. in 1983. Wilton Re's U.S. operating company, Wilton Reassurance Company, has acquired 100% of the common stock of CLIC, a wholly owned subsidiary of CNO consisting of traditional and interest sensitive life insurance policies and deferred annuities in runoff. It collected $5.6 billion in. The original version of this story was published on, National Underwriter Life & Health Magazine, SanctuaryWealth Picks Up $1B Advisory Team From Merrill, Friend of Warren Buffett Unpacks His Investing Wisdom, Cetera Adds Direct, Custom Indexing to Advisory Platform, 9 Trends That Sum Up the State of RIAs: Cerulli, Prudential Agrees to Group Life Claim Changes in DOL Settlement, Strong Universal Life Interest Pushes Up MIB Application Activity, 12 States Where Working-Age Death Counts Are Still High, U.S. Life Application Activity for Younger Consumers Rises. We will consider the evidence in the light most favorable to the verdict, giving the prevailing party the benefit of all reasonable inferences, Id. Many factors affect your FICO Scores and the interest rates you may receive. 2003). No matter what type of lien release it is that you need help with, whether, on a property, vehicle, unpaid taxes, or more, DoNotPay is the legal expert that you can rely on. Our content is intended to be used for general information purposes only. Bristol also testified that he began his employment with North American on June 30, 2000, but did not resign his position with Conseco until July 12, 2000. And, one of North American's senior managers, Carrie Hiatt, knowingly authorized Rick Lasek to work in North American's Des Moines office while Lasek was still employed by Conseco, There was evidence of wrongdoing in several North American locations including: St. Louis, Missouri; Collinsville, Illinois; Springfield, Illinois; Wichita, Kansas; Davenport, Iowa; Colorado Springs, Colorado; and Overland Park, Kansas, North American's senior manager in charge of the company's expansion into the subprime market, Ken Keeler, received compensation based on loan production. One of the most important aspects of this world is the emergence of man as a creator. A number of these now former employees testified (at the preliminary injunction hearing) that because Conseco was leaving the subprime lending market, they worried about their future, especially considering the fact that they worked on commission. The ultimate product of the lead sheets-the loan file-contained financial statements, loan applications, appraisals, income calculation worksheets, W2 forms, payroll information of Conseco customers, tax returns, and bank statements of Conseco customers. Indeed, analysts familiar with Conseco's portfolios attested that the company's investments were much more liquid, of higher quality, and more conservative than those of most insurers. It also purchased Jefferson National Life Group in 1990 ($171 million) and Beneficial Standard Life in 1991 ($141 million). Accordingly, "a motion for judgment as a matter of law at the close of the evidence `preserves for review only those grounds specified at the time, and no others.'" Conseco . These files were located in Kattleman's office at North American until he returned them to Conseco, as ordered by the district court in its TRO. Hilbert had an unusual background for a chairman of a major financial institution. All I can say is, I'm buying more.' Zachar, 363 F.3d at 72 (quoting Correa v. Hosp. You can close the account by going to the bank yourself, by phone, online on their platform even by sending them a mail. Conseco Finance Servicing Corp., Formerly Known As Green Tree Financial The company said Friday it would halt interest payments on about half of its $2.6 billion in bonds for at least the next 30 days. May 12, 2010. Conseco produced evidence that would allow a reasonable finder of fact to conclude that there was at least a threat of misappropriation of the trade secrets contained in these fourteen files. Copyright 2001-document.write(new Date().getFullYear()) Fair Isaac Corporation. We agree with the district court's observation that North American's "reprehensible" actions involved management, and were "widespread and systematic, spanning six or seven offices and involving numerous groups of employees." As Conseco increased its value and expanded its asset base, suspicions about its performance began to wane in 1993 and 1994. St. James Press, 2000. However, if the account is opened for some specific purpose and the purpose still exists, banks may in such cases refuse to close the account. Conseco Finance - Financial Services in Tempe, Arizona (AZ) Steve Hilbert Made $172 Million, and Ran Out of Cash Consumers who financed a home purchase or refinance through Conseco Finance Servicing have been in for a wild ride since the company was sold in 2003. The factors to be considered include "the degree of malice or outrageousness of the defendant's conduct, aggravating and mitigating circumstances, the defendant's financial status, the character of both parties, the injury suffered, the defendant's standing or intelligence, and the relationship between the two parties." 3 of the Int'l Bhd. In early August 2000, Conseco sent a letter notifying North American's legal department of the misconduct by Scott Bristol and his loan originators and asking that it stop. Conseco, Inc. All FICO Score products made available on myFICO.com include a FICO Score 8, and may include additional FICO Score versions. Connect the dots for them, get a supervisor involved, etc. If all these seem overwhelming, DoNotPay can actually get the lien release process started for you. . American Travellers offered long term care insurance, and Transport provided cancer insurance. It is apparent that North American developed the theory raised in their Rule 50(b) motion only after the jury's verdict because it (1) failed to object to the general-verdict form, (2) offered no jury instructions explaining Missouri's difficult proof standard for lost profits, and (3) made no substantive objection to the damage instruction. It collected $5.6 billion in premiums last year and has 5.7 million policyholders. Walsh, 332 F.3d at 1158 (quoting Rockport Pharm., Inc. v. Digital Simplistics, Inc., 53 F.3d 195, 197 (8th Cir. However, the Court also explained that when compensatory damages are substantial, "perhaps [a punitive award] only equal to compensatory damages" may be appropriate. [citation needed], In 1998, Conseco purchased the former Greentree Financial, one of the largest financiers of mobile homes, in an attempt to diversify into consumer financial services. SYDNEY (Reuters) - A consortium of private equity firm KKR & Co LP KKR. The company's stock had returned an average of 39 percent a year since becoming a public company in 1985. North American next argues that, even if the loan files and lead sheets are considered trade secrets, Conseco still "did not make a submissible case of either the fact of damages or the amount of damages." Some of these former employees also expressed concern about Conseco's overall future financial performance. Odds are they may even be the same title company that US Bank is using for the new proposed refinance as well. It also moved much of its Lincoln subsidiary from Kentucky. Removing a state tax lien from public record, What Is a Lien Release on a Car and What to Expect, How to Secure a Lien Release in Illinois Instantly, How to Secure a Vehicle Lien Release Immediately, How to Get a Capital One Lien Release Hassle-Free, 3 Easy Steps to Filing a Release of Lien Form In New Mexico, State Tax Lien Statute of Limitations In California Explained. Importantly, the company had eliminated much of its debt burden by 1994. Long teetering on the brink, insurance and finance giant Conseco has filed for Chapter 11 bankruptcy protection. Your situation isn't that uncommon, mortgage companies go out of business all the time and title companies are used to dealing with issues like these. Enjoy reading our tips and recommendations. It's the third-largest corporate bankruptcy filing in history. CCP was then merged into Conseco, and Beneficial Standard Life Insurance and Great American Reserve Insurance, both subsidiaries of CCP, became subsidiaries of Conseco. Although many insurers suffered severe setbacks during the U.S. recession and experienced staggering declines in the value of their portfolios, Conseco swelled its asset base to $11.8 billion and doubled its workforce to almost 1,100. The Bolt loans-for-stocks plan brings up echoes of Conseco's bankruptcy The caller informed Mambretti that all of his personal financial information-which he had entrusted to Conseco-had moved with the loan originator to North American's St. Louis office. [5], CNO Financial was incorporated in 1979 as Security National of Indiana Corp. by Stephen Hilbert. Termination of the agreement, however, created bank and accounting fees of about $36 million and spurred a Merrill Lynch analyst to downgrade the company's stock. Upon emergence from Chapter . at 435, 121 S. Ct. 1678. Conseco is the nation's 26th-largest life insurance company. Who is the new host of Dancing with the Stars? After all, a $100 investment in Conseco in 1988 would have returned $2,062 in 1993. [4] Its insurance subsidiaries provide life insurance, annuity and supplemental health insurance products to more than four million customers in the United States. Walsh, 332 F.3d at 1158. Principal Subsidiaries: Bankers Life and Casualty Company; Conseco Annuity Assurance Company; Conseco Direct Life Insurance Company; Conseco Health Insurance Company; Conseco Life Insurance Company; Conseco Life Insurance Company of New York; Conseco Medical Insurance Company; Conseco Risk Management, Inc.; Conseco Senior Health Insurance Company; Manhattan National Life Insurance Company; Pioneer Life Insurance Company; United Presidential Life Insurance Company; Washington National Insurance Company; Conseco Capital Management, Inc.; Conseco Variable Insurance Company; Conseco Fund Group; Conseco Finance Corp. Another route you can take is to reach out to the county recorder-clerk's office and ask how they deal with reconveyances for trust deeds from companies that are no longer in business. A study of the top U.S. insurers in 1991 showed that only 48 percent of their investments were fixed maturities, whereas over 50 percent were tied up in real estate and other less dependable assets. The only way to change mortgage servicers is to refinance your loan and move to a lender that services the loans they originate. Id. Zachar v. Lee, 363 F.3d 70, 72 (1st. James S. Cole of St. Louis appeared on the brief. Therefore we begin by noting that the district court gave correct and distinct instructions relating the purpose and standard for punitive damages, and turn our focus to the reprehensibility of North American's conduct. CNO Financial Group is the parent company of seven insurance companies, including Bankers Life and Casualty Company and Colonial Penn Life Insurance Company. Ann. In May 1994, CCP II made the first in a series of expected acquisitions when it agreed to purchase Statesman Group, Inc. for $350 million. Copyright in this article as an independent work may be held by the author. Hilbert's company acquired Consolidated National Life Insurance Co. in August 1983. Get a Conseco Finance Servicing Corp Lien Release [3 Steps] - DoNotPay Box 6172 Rapid City, South Dakota U.S.A. Listen to free podcasts to get the info you need to solve business challenges! I did not know it had a lien until i tried to register at the DMV the lien is with Greentree financial,which was bought out by consco/conseco financial which went bankrupt in 2002. At trial, Conseco's evidence established that thousands of Conseco's lead sheets were in North American's possession, that employees worked simultaneously for both companies, that Conseco's loan documents were faxed to senior management at North American, and that employees from several of Conseco's offices had taken Conseco's loan documents to North American.3 Conseco offered expert testimony that approximately five percent of Conseco's lead sheets result in funded loans, each with an average-net profit per loan of $4,000. The jury's $3.5 million compensatory award was issued by general verdict, after the jury returned verdicts for Conseco on two claims, unfair competition and tortious interference. As Conseco headed into 1998, the company had a number of accomplishments under its belt. Conseco stock hit a high of. US Bank doesn't really care if you pay them off or not, either you pay them off and they regain that ability to extend new credit to someone else or you keep paying the monthly payments and they make interest off your loan. All rights reserved. Look through your paperwork to find out who that title company was and reach out to them to explain the issue and what you are looking to accomplish. It moved that concern's headquarters from Dallas to Carmel. Shortly after this employee exodus began, Conseco received a letter from one of its St. Louis branch customers, Michael Mambretti, complaining that his confidential loan information had been taken by a Conseco loan originator, from Conseco to North American. 2d 674 (2001). Stephen C. Hilbert Stephen C. Hilbert, the man who founded Conseco 21 years ago and built it into a highflying insurance industry giant through a series of acquisitions, was forced to resign yesterday. In 1989, for instance, Conseco invested in a powdered drink mix developed by an Indiana doctor. As stated in the company's 1993 annual report, 'Our operating strategy is to consolidate and streamline the administrative functions of the acquired companies, to improve their investment yield through active asset management and to eliminate unprofitable products and distribution channels.'. North American moved for summary judgment, and the district court granted North American's motion as to misappropriation of customer lists and certain financial information. When you register for our products and services, we also collect certain personal information from you for identification purposes, such as your name, address, email address, telephone number, social security number, IP address, and date of birth. The purchase included Massachusetts General Life, Philadelphia Life, Lamar Life, and Wabash Life. The auction for former Green Tree Financial in St. Paul, held Tuesday in Chicago, resulted in a Wednesday morning deal, according to news reports. In Vigoro, the court noted that if the contacts had been located throughout the country the information would have been considered to be a trade secret. Under the terms of the proposed plan, which the company says is consistent with the agreement in principle announced on Dec. 18, 2002, CNC will substantially reduce its debt and future annual interest expense. In contrast, more than 80 percent of Conseco's portfolio comprised fixed maturities, and only two percent consisted of real estate holdings. The auction also drew bids and counter-bids from a partnership of Warren Buffett's Berkshire Hathaway Inc. and a consortium that included the Wall Street investment firm Bear Stearns. Missouri law places no limit on punitive awards, but requires that "when punitive damages are awarded by a jury, both the trial court and the appellate court review the award to ensure that it is not an abuse of discretion." Conseco planned to retain its proven strategy of using innovative management techniques to increase the value of acquired holdings. Merrion Group analyst David Erb said CFN may have bought a lot of Conseco's asset-backed securities, which trade at steep discounts, and may plan a controlled liquidation of the firm once it gets bankruptcy protection. Conseco Sells Former Green Tree Finance Unit For $1 Billion However, he speculated that as many as ten of these former Conseco customers could have switched their business to North American. The company said it would divest of non-core assets, and it sold seven percent of its stock to private investment firm Thomas H. Lee Company for $478 million. Conseco filed a three-count complaint alleging 1) misappropriation of trade secrets, 2) unfair competition, and 3) tortious interference with business relations.
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