Bankrupt Conseco has sold the General Motors Building in midtown Manhattan for $1.4 billion and hopes to emerge from the third-largest bankruptcy in U.S. history as early as Sept. 9 if a judge approves its latest financial plan.
Conseco bought the 50-story GM Building for $878 million in 1998 in partnership with developer Donald Trump. The sale of the trophy building, which overlooks Central Park, would help bolster the company's cash position as its prepares to emerge from bankruptcy.
U.S. Bankruptcy Judge Carol A. Doyle is expected to rule on Conseco's plan within the next few weeks. The Carmel, Ind.-based insurer and finance company has whittled down its debt from more than $7 billion to $1.4 billion.
The company cleared its last major obstacle last week when the U.S. Trustee's Office agreed to drop its objections. U.S. Trustee Ira Bodenstein had bojected to portions of the plan that provided broad legal protections fro Conseco officials and forced some investors to drop their objections to the plan in exchange for recovering some of what was owed them.
If the judge does not approve the plan, Conseco's struggling insurance companies could be forced into receivership and sold, effectively leaving Conseco with no assets of any value.
The company wound up in bankruptcy when it collapsed under a huge debt load resulting from a rash of acquisitions in the 1990s, including the $6 billion purchase of Green Tree, the nation's largest lender to mobile-home buyers.
Its portfolio of mobile-home loans is being spun off as part of the bankruptcy reorganization.