US insurance giant files for bankruptcy
Insurance and loan giant Conseco has filed for bankruptcy with debts of £4bn ($6.5bn), becoming the third biggest US insolvency after WorldCom and Enron.
The company defaulted on bank and bond debts but its bankruptcy did not entirely surprise Wall Street. Last month Conseco reported a quarterly loss of $1.8bn and warned it might go bust.
Conseco’s insurance subsidiaries have been excluded from the bankruptcy and will continue to honour policies.
The company’s losses came following an acquisition spree which included a $6.4bn deal in 1998 to by mobile home lender Green Tree Financial at the peak of the mobile home boom.
In August the company also said it would default on its debts and its chairman and chief executive Gary Wendt resigned.
Conseco’s holding company was de-listed in the summer from the New York Stock Exchange and is facing an investigation by the Securities and Exchange Commission.