Conseco emerges from Chapter 11; will issue 98 million shares of common stock

By Carlise Newman

Chicago, Sept. 11 - Conseco, Inc. announced late Wednesday that its sixth amended joint plan of reorganization under Chapter 11 has become effective and the company has emerged from bankruptcy.

Under the terms of the plan, the company has emerged as a Delaware corporation with a new capital structure consisting of a $1.3 billion secured bank facility; new convertible preferred stock with a liquidation preference of $860 million; new warrants to purchase 6 million shares of common stock at $27.60 per share; and 100 million shares of new common stock.

The company expects to issue these securities shortly.

The new common stock will be listed on the New York Stock Exchange under the symbol CNO and the new warrants will be listed as CNO WS.

The new convertible preferred stock will be distributed to the pre-petition lenders, the new warrants will be distributed to the holders of the trust preferred securities, and the new common stock will be distributed to the holders of bonds, both exchange notes and original notes, general unsecured claims against Conseco, general unsecured claims against CIHC Inc. and TOPrS.

The initial 98 million shares is expected to be distributed as follows:

* exchange note claims will receive 60.6 million shares, a recovery of 72%;

* original note claims will receive 32.3 million shares, a recovery of 42%;

* general unsecured claims will receive 1 million shares, a recovery of 22%;

* CIHC general unsecured claims will receive 1.9 million shares, a recovery of 100%;

* TOPrS will receive 1.5 million shares, a recovery of 1.27% (excluding the new Conseco warrants and other collection rights).

The projected recoveries are based on an estimated value of the common stock of $16.40 per share. The initial distributions are expected to represent 98% of all new common stock to be distributed under the plan.

The company may make additional distributions to holders of pre-petition bonds and/or general unsecured claims for disputed claims. There will be only one distribution of stock to TOPrS holders.

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