Conseco CEO resigns but still chairs board

INDIANAPOLIS -- Gary Wendt resigned Thursday as chief executive officer of Conseco Inc., but said he would stay on as chairman of the insurance and finance company's board as it continues restructuring talks that could lead to a bankruptcy filing.\nThe negotiations with creditors to restructure more than $6 billion in debt will continue under Bill Shea, Conseco's president and chief operating officer, the company said in a statement.\nThe talks, which began in August, are continuing "toward what Conseco hopes to be a consensual restructuring," the statement said.\nAnalysts and investors have said they expect Conseco to make a Chapter 11 prepackaged bankruptcy filing that could result in an agreement by creditors to forgive debt in exchange for equity in Conseco. In a prepackaged bankruptcy, creditors negotiate terms before a filing is made and seek a judge's approval.\n"Our day-to-day operations are in the hands of strong, capable leaders," Wendt said in the company's statement. "Our management team, and in particular our business unit leaders, are doing an exemplary job. We have great confidence in them to keep the ship on course."\nThe company's stock is selling for just pennies a share after falling from a high of more than $50 a share in 1998 and being dropped this summer from the New York Stock Exchange.\nWendt, the former head of General Electric's finance division, was awarded a $45 million signing bonus when he was hired to replace Conseco founder Stephen Hilbert in June 2000.\nHilbert was ousted after piling up $8.2 billion in debt through acquisitions in the 1990s.\nWendt has cut debt by about $2.4 billion over two years, partly through sales of assets outside Conseco's core businesses in insurance and finance.\nBut Conseco, based in the Indianapolis suburb of Carmel, announced Aug. 9 that it was abandoning a turnaround plan that Wendt began.\nConseco said it would instead take a more radical approach by meeting with stakeholders to negotiate a reorganization of debt and operations.\nFive days later, Conseco ann-ounced a $1.3 billion second quarter loss and said that federal investigators were reviewing its accounting. The investigation focuses on accounting around the time of Hilbert's April 2000 resignation.\nIn recent weeks, Conseco has been named in three shareholder lawsuits that allege the company misled investors concerning the company's financial problems.\nIn Conseco's May 1 first-quarter earnings release, Wendt said the company had enough cash to make short-term debt repayments.\n"The 2002 liquidity issues are behind us ... The 2002 shortfall is covered, and we are confident about liquidity in 2003," Wendt said.