UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): February 21, 2002
CONSECO, INC.
(Exact name of registrant as specified in its charter)
Indiana 1-9250 35-1468632
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
11825 North Pennsylvania Street
Carmel, Indiana 46032
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(Address of principal executive offices) (Zip Code)
(317) 817-6100
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(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address,
if changed since last report.)
Item 5. Other Events
As previously reported, Conseco, Inc. (the "Company") has a securities
case pending in the United States District Court for the Southern District of
Indiana, captioned: "In Re Conseco, Inc. Securities Litigation", cause number
IP00-585-C-Y/S involving consolidated claims under Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Sections 11, 12(a)(2), and 15 of the
Securities Act of 1933, with respect to common stock and various other
securities issued by the Company and Conseco Financing Trust VII.
On January 10, 2002, the Company entered into a Memorandum of
Understanding (the "MOU") to settle the consolidated securities cases that are
pending in the United States District Court for the Southern District of Indiana
for $120 million subject to court approval. Under the MOU, as amended on
February 12, 2002, $106 million must be placed in escrow by March 8, 2002. The
remaining $14 million is due in two installments: $6 million by April 1, 2002,
and $8 million by October 1, 2002 (all payments with interest from January 25,
2002). Unless the Company's directors and officers insurance carriers pay the
full $100 million in coverage that applies to the securities cases, the Company
does not expect to consummate the settlement.
As previously reported, the Company has commenced a lawsuit against the
insurance carriers in Marion County Circuit Court in Indianapolis, Indiana
(Conseco, Inc., et. al. v. National Union Fire Insurance Company of Pittsburgh,
PA., Royal Insurance Company of America, Westchester Fire Insurance Company, RLI
Insurance, Greenwich Insurance Company and HSBC Insurance Brokers Limited, Cause
No. 49C010106CP001467) seeking, among other things, a judicial declaration that
coverage for the claims made in the lawsuit exists. The primary insurance
carrier, National Union Fire Insurance Co. of Pittsburgh, PA, has paid its full
$10 million in policy proceeds toward the settlement; in return, National Union
has been released from the coverage litigation pending in state court in Marion
County, Indiana. The first excess insurance carrier, Royal Insurance Company,
has placed its full $15 million in policy proceeds in escrow toward the
settlement, although Royal is reserving its rights to continue to review and
litigate its obligations under its policy. The remaining excess carriers have
not committed to pay or escrow their collective $75 million in policy proceeds
toward the settlement, although they have advised the Company that they are
continuing to investigate the Company's claim. There can be no assurance that
the insurance carriers, other than the primary carrier, will pay their policy
proceeds toward the settlement. If they do not do so by March 8, 2002, the
plaintiffs have advised us that they will terminate the settlement, and the
securities litigation will proceed. Should that occur, there can be no assurance
that the securities litigation can be resolved for $120 million, and the Company
will proceed with its coverage litigation in Marion County, Indiana, against
those carriers that caused the settlement to terminate.
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CONSECO, INC.
DATE: February 21, 2002
By: /s/ Charles B. Chokel
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Name: Charles B. Chokel
Title: Executive Vice President
and Chief Financial
Officer