US insurer in third-biggest bankruptcy

Conseco has naming rights to Indianapolis' Fieldhouse

Insurance and loans giant Conseco has filed the third biggest US bankruptcy after WorldCom and Enron, with $6.5bn (£4bn) in outstanding debts.

The company, which was founded by encyclopaedia salesman Stephen Hilbert, had already defaulted on bank and bond debts and had been expected to go bust.

Conseco warned last month it might file for bankruptcy protection after reporting a quarterly loss of $1.8bn.

Insurance subsidiaries were excluded from the filing and would continue to honour policies.

The holding company was de-listed from the New York Stock Exchange in the summer and faces an investigation by stock market regulator, the Securities and Exchange Commission.

Trouble foreseen

The company made huge losses after an acquisition spree.

A $6.4bn deal in 1998 to buy mobile home lender Green Tree Financial at the peak of the mobile home boom is thought to be the main cause of Conseco's problems.

In 2000, Conseco ousted chairman and chief executive Mr Hilbert, who had one of the biggest pay packages in the US, and replaced him with the head of GE Capital Gary Wendt.

He embarked on an asset disposal programme, including Mr Hilbert's extensive art collection and the company's riverboat casino.

In August this year the company announced it would default on its debts and Mr Wendt resigned a month later to be replaced by William Shea.