In viewing this evidence in the light most favorable to the verdict, we hold there is ample evidence supporting each element of an unfair competition claim. Bhojwani is also a member of CNO's Board of Directors.[12]. Conseco Inc.'s money-losing consumer finance unit would be split into two pieces and sold for $1 billion under the winning bid in an all-night bankruptcy auction that concluded Wednesday. The Title Company involved (god I hope there is one involved) will pull their old deal file and figure out what went wrong. Most notably, Conseco's management decided to discontinue loan services in the subprime lending market. Review the required documents based on the type of loan: 3. [11] In the process of reorganization, GreenTree was divested and thereafter Conseco solely focused on the insurance industry. Phone: 800-643-0202 Web: Category: Mortgage Companies Conseco Finance / GreenTree Deceptive practice / stole my home St. Paul Minnesota *Consumer Comment: Sold your house to Conseco? Conseco claimed the acquisition was a perfect fit, as both companies served the same target market, but many industry observers were skeptical, and Conseco's stock took a plunge. In 1992, just ten years after starting his business, Hilbert was one of the highest paid executives in the United States. For the foregoing reasons, we affirm the opinion of the district court in part and reverse in part. Id. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. This is the case for many customers of Conseco Finance Servicing Corporation. Mo. To complement that holding company's subsidiaries, Security National of Indiana was established to develop and market new life insurance products and services. Corp., 136 F.3d 276, 286 (2d Cir. (Wilton, Connecticut) - Today, Wilton Re completed the acquisition of Conseco Life Insurance Company ("CLIC") from CNO Financial Group ("CNO"). In contrast to CCP, the new partnership was designed to focus on the acquisition and improvement of larger companies valued at $350 million to $1.5 billion. Conseco Finance Corp - Company Profile and News - Bloomberg Markets Bloomberg Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately. Hilbert's strategy seemed relatively simple to most observers: purchase troubled insurance companies with potential and increase their value by turning them around. Once a lead sheet is received in a branch office, the office manager then forwards it to a loan originator, who calls these potential customers to offer Conseco's financial services. By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Importantly, though, Hilbert also searched for insurers that were inefficient and bloated with excess personnel. Conseco endured a string of disparaging articles in major business journals in the early 1990s that questioned its integrity. Shortsellers--investors that had bet on Conseco's downfall--were enraged when its earnings continued to multiply. Conseco reorganized and caught its breath in 1988. North American argued in its Rule 50(a) motion (styled "Motion for Directed Verdict") that Conseco "failed to offer sufficient proof that it sustained damages that were proximately caused by [North American's] use or misappropriation of trade secret documents." P. 50(b); Martin H. Redish, 9 Moore's Federal Practice 50.41 (3d ed.2003). Although the two companies merged to form one holding company late in 1983, internal operations still reflected Hilbert's original concept. On appeal, North American offers an eloquent and persuasive argument regarding the stringent requirements relating to the calculation of lost profits, particularly in relation to "net" profits. Galdieri-Ambrosini v. Nat'l Realty & Dev. The venture failed. 1994), aff'd in relevant part, 82 F.3d 785 (8th Cir. Long teetering on the brink, insurance and finance giant Conseco has filed for Chapter 11 bankruptcy protection. The factors to be considered include "the degree of malice or outrageousness of the defendant's conduct, aggravating and mitigating circumstances, the defendant's financial status, the character of both parties, the injury suffered, the defendant's standing or intelligence, and the relationship between the two parties." Innovative Beginnings in the Late 1970s and Early 1980s, Stephen C. Hilbert founded the company and guided its meteoric rise. What happens to my money if the bank closed my account? of Elec. The first, Kevin Kattleman, a former area manager in its O'Fallon, Illinois, office, testified that fourteen customer loan files from Conseco were in his possession after he began to work for North American. Conseco, in its "First Amended Complaint," added two additional counts-participation in breach of fiduciary duty, and a separate count for injunctive relief. So, we purchased a mobile home in 1997 and it was financed through Greentree Financial. Not only did the company's stock fall about 15 percent upon announcement of the acquisition agreement, but it continued to drop; from a high of $58.12 a share in April 1998, Conseco stock dropped to about $20 a share in late 1999. North American senior manager, Ken Keeler, provided rebuttal expert testimony, stating that the average-net profit on a loan was $2,100.4 Carrie Hiatt, a North American witness, further testified that approximately ten percent of certain Conseco leads resulted in funded loans. Therefore we begin by noting that the district court gave correct and distinct instructions relating the purpose and standard for punitive damages, and turn our focus to the reprehensibility of North American's conduct. The company went on an acquisition binge, taking on a huge debt load that is now the basis of its plight. Unlike a collection on your credit report, which simply notes delinquent payments, a lien prevents you from selling that asset until you have finished making the payments. In 1996 the company was named to the Fortune 500, and in 1997 Conseco was added to the S & P 500 Index. 'We are going to stay away from food and beverage.' Share & Print. Because the evidence is susceptible to a reasonable inference supporting the verdict, we affirm the district court's decision to submit this claim to the jury and its subsequent denial of judgment as a matter of law. To help achieve this objective, Conseco formed a new limited partnership in early 1994, Conseco Capital Partners II, L.P. CCP II included 36 limited partners who had a combined investment potential of $5 billion to $7 billion. We have worked very hard with certain key creditor constituencies to develop a plan that will provide the reorganized Conseco with a capital structure that can be supported by cash flows from ongoing operations, Shea said in a statement. Conseco was investing tens of millions of dollars into new entertainment-related projects late in 1993 and 1994, including some riverboat gambling proposals. This financial advisor is listed on Financial Advisory Firms under Financial Advisory Services - Financial Services. Two of the loan originators that Lasek recruited to leave Conseco with him eventually returned to work at Conseco-after a change of heart-and testified about Lasek's actions. But when the company servicing the mortgage has been sold several times, it's hard to know where to go to demand the lien release. There are several ways to get a Release of Lien if you originally financed your home with Conseco. Homeowners who faithfully pay the mortgage every month have every right to expect the mortgage company to agree to release the lien on the property once the debt is paid. It began insurance operations in 1982 and became a public company in 1985. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Conseco, Inc. provides insurance, investment, and lending services to more than 12 million customers. More details on software and accessibility are available at WebAIM.org. Indeed, the conduct involved repeated actions in multiple offices.13 North American's actions also involved trickery and deceit, and an utter disregard for Conseco and-even more heinously-the privacy of its customers. [citation needed] In 1986 Conseco acquired Lincoln Income Life Insurance Company for $29 per share or $32.3 mil. Several of these former Conseco employees resigned after receiving solicitations from North American. A review of the record leaves us with no doubt that the jury had sufficient evidence before it (albeit conflicting evidence) to conclude that North American had engaged in unfair competition and caused damage to Conseco. One caveat to this rule is that some banks will charge an early account closure fee if you close an account soon after opening it. The company's headquarters is located in suburban Indianapolis, Indiana. Typically, the lender issues a "notice of release" when that happens, and the lien is taken off the books, and the trust deed may be returned to you. The company also made loans of nearly $550 million to its executives and directors. Later, at trial, he admitted they were working for both companies at the same time. Rockport Pharm., Inc. v. Digital Simplistics, Inc., 53 F.3d 195, 197-98 (8th Cir. We affirm in part and reverse in part. Conseco subsequently severed its relationship with Merrill Lynch, which had handled Conseco's initial public offering. Zachar, 363 F.3d at 74 (quoting Davignon v. Clemmey, 322 F.3d 1, 13 (1st Cir. To meet these goals, Conseco in March agreed to acquire Green Tree Financial Corporation, a diversified financial services company that offered home equity and home improvement loans, financing packages for the purchases of recreational vehicles and equipment, and credit cards. So, we purchased a mobile home in 1997 and it was financed through Greentree Financial. Indeed, analysts familiar with Conseco's portfolios attested that the company's investments were much more liquid, of higher quality, and more conservative than those of most insurers. A creditor may file a lien against you for any goods or services you contracted to purchase but failed to actually pay for. The company's net income increased 46 percent in 1992 to $170 million, and 75 percent in 1993 to $297 million. 2d 585 (2003) (quoting Gore, 517 U.S. at 575, 116 S. Ct. 1589). Conseco also filed a motion for a temporary restraining order prohibiting certain North American employees from taking, using, or disclosing documents from Conseco's loan files, and to return any information taken from Conseco's files. "CNO Financial Group, Inc. (CNO) Income Statement", "CNO Financial, Form 8-K, Annual Report, Filing Date May 11, 2015", Form 10-K of CNO Financial Group for 2012, Shareholders Overwhelmingly OK Conseco Name Change, "America's 50 Most Trustworthy Financial Companies", YouTube - 1998 - Commercial - Conseco Direct Life - formerly Colonial Penn Life - starring Ed McMahon, "CNO Financial, Form T-3, Filing Date Mar 31, 2003", "CNO Financial, Form 8-K, Current Report, Filing Date Sep 15, 2003", "Insurance Firm Conseco Files for Bankruptcy", "CNO Financial, Form 10-K, Annual Report, Filing Date Feb 20, 2015", "CNO Financial, Form 8-K, Current Report, Filing Date May 12, 2010", "CNO Financial Group Reports Fourth Quarter and Full Year 2014 Results", "Insurance Company CNO Sells India Operations To Cognizant", CNO's Ownership of Washington National Insurance Company, https://en.wikipedia.org/w/index.php?title=CNO_Financial_Group&oldid=1151599318, This page was last edited on 25 April 2023, at 01:33. For example, it avoided the many companies that in the 1980s had invested heavily in risky real estate and junk bonds. Another of North American's witnesses, Perry Schatz, testified only five percent of Conseco's leads result in a funded loan. Observers now say Green Tree's problems should have been obvious when Conseco, under the leadership of its co-founder Stephen Hilbert, bought it. Principal Subsidiaries: Bankers Life and Casualty Company; Conseco Annuity Assurance Company; Conseco Direct Life Insurance Company; Conseco Health Insurance Company; Conseco Life Insurance Company; Conseco Life Insurance Company of New York; Conseco Medical Insurance Company; Conseco Risk Management, Inc.; Conseco Senior Health Insurance Company; Manhattan National Life Insurance Company; Pioneer Life Insurance Company; United Presidential Life Insurance Company; Washington National Insurance Company; Conseco Capital Management, Inc.; Conseco Variable Insurance Company; Conseco Fund Group; Conseco Finance Corp. PITCHERS ARE RED HOT: The Great Lakes Loons gave up just 15 runs while taking five out of six Mid-Michigan police officer accused of defrauding Meijer of $10K, Crime log: Harassment complaints made by township residents. Take out more than a certain amount, however, and the bank must report the withdrawal to the Internal Revenue Service, which might come around to inquire about why you need all that cash. North American responds that the Conseco employees engaged in these acts because of Conseco's financial woes, and that they were simply concerned about their livelihood. During this experience he conceived the idea for a new kind of enterprise--a life insurance company that would combine the flexibility and innovation of a small firm with the marketing savvy, financial strength, and computer systems of a big financial institution. It is clear to us that Conseco derives economic benefit from this information. Cir. CNO Financial Group is the parent company of seven insurance companies, including Bankers Life and Casualty Company and Colonial Penn Life Insurance Company. These documents contained information concerning Conseco's internal operations, including monthly retail point income reports generated by each Conseco office, reports ranking the retail volume by branch, reports of retail loans funded by region, financial summaries of each branch, expense ratio reports, expense analysis reports, expense analysis retail volume variance reports, and reports on credit insurance protection. Critics charged that Conseco's amazing asset growth was largely the result of questionable accounting techniques. The company said it would divest of non-core assets, and it sold seven percent of its stock to private investment firm Thomas H. Lee Company for $478 million. In 1998 Stephen Hilbert received about $69.7 million in compensation. In December of that year Hilbert's two holding companies were merged under the name Conseco, Inc. With about 25 employees and assets worth $3 million, Conseco substantially improved the performance of its two acquisitions during 1983 and 1984. Upon arriving at North American, Bristol gave these names and numbers to loan originators as leads, who contacted these former Conseco customers. Accordingly, "a motion for judgment as a matter of law at the close of the evidence `preserves for review only those grounds specified at the time, and no others.'" Im going TO SAY THIS IN BIG BIG LETTERS.. __________________________________________________. The district court, however, denied Conseco's remaining request for injunctive relief relating to North American's solicitation of its employees. The winning bid is subject to Judge Carol A. Doyle's approval at a Friday hearing in Chicago. 'This (criticism) goes back to instinct and gut feeling, and no hard facts,' said money manager Martin Lizt in a January 1993 issue of Financial World. 'I think you'd hear the same thing if you were talking to Bill Gates or anyone else who has achieved success. Well GreenTree Financial went bankrupt and their accounts were taken over by Conseco Financial. 1981); Hinkle v. Christensen, 733 F.2d 74, 76 (8th Cir. Flowers & Co. LLC, Fortress Investment Group LLC and Cerberus Capital Management _ offered to buy all of Conseco Finance. Accordingly, we find no error in the district court's refusal to grant judgment as a matter of law on the unfair competition claim. It did not, and by failing to do so, North American forfeited its argument to the extent that it was not forfeited by the failure to assert those grounds in their Rule 50(a) motion, We agree with the district court that the common-law claim of unfair competition has likely been replaced by the statutory offense described in the Missouri Trade Secrets Act. State Farm, 538 U.S. at 425, 123 S. Ct. 1513 (citing Pacific Mutual Life Ins. According to Missouri law, a "trade secret" is information-including but not limited to-technical or nontechnical data, a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. The Carmel, Ind.-based financial services company said it has retained Wall Street investment firm Lehman Brothers to identify buyers for the Conseco Financial Corp., formally Green Tree. The purchase included Massachusetts General Life, Philadelphia Life, Lamar Life, and Wabash Life. In short, we see sufficient evidence that North American misused Conseco's trade secrets to justify the submission of the unfair competition claim and the tortious interference claim to the jury. The jury's $3.5 million compensatory award was issued by general verdict, after the jury returned verdicts for Conseco on two claims, unfair competition and tortious interference. When you register for our products and services, we also collect certain personal information from you for identification purposes, such as your name, address, email address, telephone number, social security number, IP address, and date of birth. In order to avoid this constitutional infirmity, the punitive damages award must be remitted to $7 million, an amount that is sufficiently punitive, but that does not violate notions of fundamental fairness. At the end of 2000, Conseco mobile-home loans totaled $26.3 billion, or about 55% of the firm's $46.6 billion in financial receivables, according to its annual report, filed Monday. When you finance a home purchase, you take out a mortgage, which is basically an IOU to the lender. Odds are they may even be the same title company that US Bank is using for the new proposed refinance as well. Indeed, as the insurance industry weathered record insolvencies, Conseco expanded its headquarters and opened an entirely new hub, the Conseco Annuity Center, in Dallas. As Conseco increased its value and expanded its asset base, suspicions about its performance began to wane in 1993 and 1994. Bet you are. 2003). Pony Comp., Inc. v. Equus Comp. There was an article in Business Insider awhile back that had this same topic. Conseco announced recently that it filed its Joint Plan of Reorganization and Disclosure Statement with the Bankruptcy Court. Just as he had done to sell encyclopedias in the mid-1960s, Hilbert started knocking on doors in the late 1970s. Conseco rounded out the year with two additional purchases--Colonial Penn Group, which sold life insurance to elderly American citizens, and Washington National Corp., a provider of life and health insurance and annuities. The company operates on the market for middle-class Americans. Rule 50(a) requires that challenges to the sufficiency of the evidence must be raised initially at the close of the evidence. Walsh, 332 F.3d at 1158 (quoting Cruz v. Local Union No. If the Rule 50(a) motion is denied and the case is submitted to a jury, the movant must renew the motion once again in order to preserve the issue for appeal. However, Conseco's headquarters remained in Carmel, and Hilbert planned to sustain his active management role there. However, North American also introduced several new legal theories-related to damages-not distinctly articulated in its "Directed Verdict Motion." 1993). The ultimate product of the lead sheets-the loan file-contained financial statements, loan applications, appraisals, income calculation worksheets, W2 forms, payroll information of Conseco customers, tax returns, and bank statements of Conseco customers. Further information is available in our FICO Data Privacy Policy. In 2003 we refinanced this home through US Bank, however, whenever that was done apparently US Bank never got . GE Consumer Finance, a unit of General Electric Co., will buy the assets of Mill Creek Bank, a wholly owned subsidiary of Conseco Finance, for $310 million. To its investors' chagrin, however, several of Conseco's past forays into nontraditional investments had not performed as well as its core insurance and financial holdings. Hilbert drifted into the insurance business in the 1970s. The case involves employees leaving an agriculture supply business to join a competitor. But if the lender of record has ceased to exist, it falls to the current holder of the mortgage to release the lien. Green Tree was Conseco's first acquisition not related to insurance, and it was also the largest of Conseco's acquisitions--Conseco reportedly paid about $6 billion in stock for Green Tree. In fact, in October 1993 Hilbert formed Conseco Entertainment Inc., a holding company for Conseco's future entertainment investments. Id. In 1982, Hilbert acquired his first life insurance company, Executive Income Life Insurance Co., for $1.3 million. KKR, Varde and Deutsche buy GE Capital consumer finance arm for $6.3 billion. San Francisco, 69 F.3d 1184, 1188 (1st Cir. In 1989, for instance, Conseco invested in a powdered drink mix developed by an Indiana doctor. He is mainly involved in weightlifting. North American sought this information in an attempt to pursue Conseco's loan customers and business leads. Keep in mind, just because a company services a loan today doesnt mean theyll continue to do so long term. Here the damage award is further supported by the remaining tortious interference claim. This Deed of Trust gives the lender the right to foreclose if you don't make the payments, and they agree to release it once the mortgage is paid.
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