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): September 9, 2003
CONSECO, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-31792 75-3108137
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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
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(Former name or former address,
if changed since last report)
Item 3. Bankruptcy or Receivership.
On September 9, 2003, the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division (the "Bankruptcy Court") confirmed the
sixth amended joint plan of reorganization (the "Plan") of Conseco, Inc., an
Indiana corporation ("Old Conseco").
On September 10, 2003, under the terms of the Plan, Conseco, Inc., a
Delaware corporation and successor to Old Conseco (the "Company"), emerged with
a new capital structure consisting of: (1) a $1.3 billion secured bank facility;
(2) new convertible preferred stock with an aggregate liquidation preference of
approximately $860 million; (3) new warrants to purchase 6 million shares of
common stock at an exercise price of $27.60 per share; and (4) approximately 100
million shares of new common stock. On September 15, 2003, the Company issued
these securities pursuant to the terms of the Plan.
The new common stock is listed on the New York Stock Exchange ("NYSE")
under the symbol "CNO," and the new warrants are listed on the NYSE under the
symbol "CNO WS." The new convertible preferred stock is trading in the over the
counter market under the symbol "CNSJP." The Company intends to submit a
supplemental listing application to list the preferred stock on the NYSE as soon
as the new preferred stock is held by at least 100 holders (one of the
conditions for listing the security on the NYSE), and currently expects to
receive approval for listing once this condition is satisfied and the
supplemental application is approved. Old Conseco's common stock (OTCBB:CNCEQ)
and all of its other securities have been cancelled.
Under the terms of the Plan, the new convertible preferred stock is being
distributed to the prepetition lenders, the new warrants are being distributed
to the holders of the Trust Preferred Securities commonly known as "TOPrS," and
the new common stock is being distributed to the holders of the following
prepetition claims: (1) bonds, which were separately classified as the Exchange
Note Claims (those who had exchanged their bonds in 2002) and the Original Note
Claims (those who had not); (2) general unsecured claims against Conseco, Inc.;
(3) general unsecured claims against CIHC, Incorporated (CIHC); and (4) TOPrS.
The initial distribution of approximately 98 million shares of new common stock
is being made as follows:
o Exchange Note Claims are receiving approximately 60.6 million shares, which
corresponds to a projected recovery of approximately 72%.
o Original Note Claims are receiving approximately 32.3 million shares, which
corresponds to a projected recovery of approximately 42%.
o Conseco General Unsecured Claims are receiving approximately 1 million
shares, which corresponds to a projected recovery of approximately 22%.
o CIHC General Unsecured Claims are receiving approximately 1.9 million
shares, which corresponds to a projected recovery of approximately 100%.
o TOPrS are receiving 1.5 million shares, which corresponds to a projected
recovery of approximately 1.27% (excluding the new Conseco warrants and
other collection rights).
In each case, the projected recoveries are based on an estimated value of
the common stock of $16.40 per share for purposes of the plan. The initial
distributions represent approximately 98% of all new common stock to be
distributed under the Plan. The Company may make additional distributions to
holders of prepetition bonds and/or general unsecured claims on account of
disputed claims. Under the Plan, there will be only one distribution of new
common stock to holders of the TOPrS.
A copy of the Plan is attached hereto as Exhibit 2.2. Pursuant to the Plan,
the Company adopted an Amended and Restated Certificate of Incorporation,
Amended and Restated By-laws and a Certificate of Designations with respect to
the new convertible preferred stock. It also entered into a Warrant Agreement,
Credit Agreement, Common Stock Registration Rights Agreement and Preferred Stock
Registration Rights Agreement. Copies of each of these documents and agreements
are filed as exhibits to this Current Report on Form 8-K. A copy of the final
confirmation order is attached hereto as Exhibit 2.3. Related exhibits and court
filings can be obtained at www.bmccorp.net/conseco.
The most recent unaudited consolidated balance sheet of the Company is
included in Old Conseco's Quarterly Report on Form 10-Q for the period ended
June 30, 2003, which is incorporated herein by reference.
The Company adopted "fresh-start" reporting as of its emergence from
Chapter 11, in accordance with Statement of Position 90-7 "Financial Reporting
by Entities in Reorganization under the Bankruptcy Code". These rules require
the Company to revalue its assets and liabilities to current estimated fair
value, re-establish shareholders' equity at the reorganization value determined
in connection with the Plan, and record any portion of the reorganization value
which cannot be attributed to specific tangible or identified intangible assets
as goodwill. The adoption of fresh start accounting will have a material effect
on the Company's financial statements. As a result, the Company's financial
statements published for periods following September 9, 2003, will not be
comparable with those of Old Conseco prepared before that date.
Item 5. Other Events.
Pursuant to Rule 12g-3(a) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Company's common stock, par value
$0.01 per share ("Common Stock"), is deemed registered under Section 12(g) of
the Exchange Act. The Common Stock has also been registered under Section 12(b)
of the Exchange Act in order to facilitate listing on the NYSE.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
2.2 Sixth Amended Joint Plan of Reorganization of Conseco, Inc. and
its affiliated Debtors dated September 9, 2003.
2.3 Order Confirming Reorganizing Debtors' Sixth Amended Joint Plan
of Reorganization Pursuant to Chapter 11 of the United States
Bankruptcy Code dated September 9, 2003.
3.1 Amended and Restated Certificate of Incorporation of the Company.
3.2 Amended and Restated By-Laws of the Company.
4.1 Certificate of Designations of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Class A Senior Cumulative Convertible Exchangeable
Preferred Stock and Qualifications, Limitations and
Restrictions Thereof.
4.2 Warrant Agreement between the Company and Wachovia Bank, N.A.,
as Warrant Agent.
10.1 Credit Agreement dated as of September 10, 2003 among Conseco,
Inc., Bank of America, N.A., as Agent, and other financial
institutions.
10.2 Common Stock Registration Rights Agreement.
10.3 Preferred Stock Registration Rights Agreement.
99.1 Press release dated September 9, 2003.
99.2 Press release dated September 10, 2003.
SIGNATURES
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.
September 15, 2003
By: /s/ John R. Kline
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John R. Kline
Senior Vice President and
Chief Accounting Officer