- August 29, 2002
- All Issuing Offices
- Conseco, Inc. - (Conseco Finance Corporation)
In a company statement issued on August 9, 2002, the Carmel, Indiana, based firm of Conseco, Inc. ("Conseco"), announced that it would pursue a "radical change in the company's capital structure"; as part of their financial Turnaround Plan. To that end, Conseco exercised a 30-day grace period on impending bond interest payments and has retained financial and legal advisors for the purpose of beginning immediate discussions with its debt holders, with a goal of restructuring the capital of the parent company. The New York Times reported, on August 15, 2002, that Conseco posted a net loss for the second quarter of $1.33 billion. Additionally, the Securities and Exchange Commission will begin a probe into the company's accounting practices.
Conseco is the parent company of Conseco Finance Corporation ("Conseco Finance"), located in St. Paul, Minnesota. Although it is not yet known what impact the financial difficulties of the parent company will have on Conseco Finance, Conseco's August 9, 2002 company statement noted that "First, none of our operating subsidiaries will be directly involved in the planned restructuring; and, second, we are comfortable that we will have more than ample liquidity to operate our businesses throughout this restructuring period."
Effective immediately, for all transactions funded by Conseco Finance wherein a Stewart Title Guaranty Company ("STGC") agent or approved attorney intends to issue a STGC Title Insurance Policy, the following conditions must be satisfied:
For agents who conduct the closings and disburse escrow funds:
Funding by Conseco Finance must be accomplished by wire transfer of funds to your escrow account the day before closing, and you must verify receipt of the wire transfer prior to conducting the closing.
For agents who issue policies on transactions wherein the escrow funds are disbursed by a third party, i.e. closing attorney:
Immediately notify all your closing attorneys: 1) Stewart requires, on all transactions funded by Conseco Finance, that funding must be accomplished by wire transfer to their escrow account the day before closing; and, 2) your closing attorney must certify, to you, receipt of Conseco Finance's wire transfer.
If your office has closed any transactions wherein funding has not yet been received, please contact Stewart Title Guaranty Company's National Legal Department IMMEDIATELY. Please contact:
Stewart Title Guaranty Company
1980 Post Oak Boulevard, Suite 710
Houston, Texas 77056
(713) 629-2248 (FAX)
Thank you for your anticipated cooperation.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.