|Reorganization May Pre-empt Sale of Conseco Finance
Fannie, Buffet among suitors
March 3, 2003
By MortgageDaily.com staff
|A group led by Warren Buffet’s Berkshire Hathaway is one of many bidders for bankrupt Conseco Finance Corp., the St. Paul Pioneer Press reported. But the group — or any other bidder — may not get a piece of Conseco after all. Adding to the buzz of an already much-talked about auction, Conseco this week agreed to a proposal for an $845 billion reorganization plan as an alternative to the sale of the company. The proposal, made by a Goldman Sachs syndicate, was one of the auction’s many points of drama. It would only go through if sale “for a reasonable value” isn’t obtained at auction, the publication said. The auction was to be held Friday, Feb. 28, but has been delayed a week. The $70 million bid Fannie Mae placed on Conseco’s $23 billion mobile-home loan servicing portfolio recently raised the ire of the mortgage industry. But that bid most likely will fall flat, a source close to the auction told the Pioneer Press. Fannie has said this week that its $70 million bid was only intended to stimulate activity in the bankruptcy proceedings, but critics said a government-sponsored enterprise shouldn’t place itself in a competitive position against other companies. The winning bid for Conseco must surpass the pending sales agreement made in December with CFN Investment Holdings, a New York-based investment group, for about $1 billion. Calls made to Conseco were not answered late Friday afternoon. Conseco is a mobile-home and consumer lender based in St. Paul, Minn. It filed chapter 11 bankruptcy in December, in what is one of the largest filings in U.S. corporate history. At Sept. 30, it listed $52.2 billion in assets.|
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