Conseco Gets Extension from Creditors to Jan. 11

Indiana-based Conseco Inc. and its creditors have reached another forebearance agreement, which extends the period during which the senior lenders will refrain from taking legal action to enforce payment of around $1.5 billion in debt claims, from November 26 to January 11, 2003, giving them another six weeks to work out a solution to the company’s financial problems. The agreement was initially executed on October 16.

The marathon negotiations between Conseco and its creditors, which have been going on since last August, have not yet resulted in the company’s long predicted bankruptcy, so there’s still hope for a restructuring plan that would include a “pre-negotiated” chapter 11 filing.

The discussions center around a plan to restructure the company’s equity by essentially exchanging the bonds held by the creditors into ownership of the company. Current shareholders would receive little, if anything, under the proposals.