Ind. Conseco Inc., founder Stephen Hilbert and the insurer reached a confidential settlement this week in a $250 million dispute over company-backed loans and debt.
After an all-night negotiating session, the 14-page agreement was reached about 6 a.m., and disclosed in a closed Hamilton Circuit Court about four hours later.
It spares Hilbert and his wife, Tomisue Hilbert, a public airing of their financial affairs by eliminating the need for a court hearing which had been set for Wednesday on the dispute.
During that hearing, Conseco attorneys were scheduled to question Hilbert about the assets he had available to pay his debts to the Carmel-based insurance company.
Both Conseco and the Hilberts agreed that the terms of the settlement would remain confidential, and no details were released.
“I’m ecstatic,” Hilbert said afterward, explaining that the settlement would benefit his family, Conseco and the community.
Hilbert, who has said he is effectively broke, was Conseco’s chairman and CEO until 2000. He said he and his wife were eager to return their attentions to their own business ventures.
Attorneys said the settlement resolves the $84 million judgment Conseco won in Hamilton Circuit Court over interest Hilbert owed on company-backed loans he used in the 1990s to buy Conseco stock. Such loans are now illegal.
Conseco attorneys had argued that he sought to avoid repaying the debt by transferring assets to others, including his wife.
The agreement also puts to rest a lawsuit pending in Illinois in which Conseco was seeking more than $160 million in debts from Hilbert.
Conseco slid into bankruptcy reorganization in 2003 and the stock became worthless. Hilbert, who founded the company in 1979, was its chairman and chief executive until April 2000.
His sprawling French-style mansion will be sold at a sheriff’s auction Dec. 28 as Conseco seeks to recover millions of dollars Hilbert owes it.
The 23,000-square-foot home, situated on a 40-acre estate and includes a full-size replica of Indiana University’s Assembly Hall basketball court, was put on the market in July for $20 million, but failed to sell.
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