Former Ind. Conseco Founder’s Home to be Sold at Auction

Conseco Inc. founder Stephen Hilbert’s sprawling French-style mansion, which has been on the market for months, will be sold at a sheriff’s auction next month.

Conseco put the 23,000-square-foot home on the market in July for $20 million to help recover millions of dollars a court ruled its former CEO owes it. But some potential buyers have been wary of being drawn into the legal dispute between the insurer and Hilbert.

Last month, the U.S. Supreme Court refused to hear Hilbert’s appeal of a judge’s order that he repay the company $84 million in stock loans.

The sheriff’s sale of the mansion in the northern Indianapolis suburb of Carmel, set for Dec. 28, would make Conseco’s claim more clear to the property, which is situated on a 40-acre estate and includes a full-size replica of Indiana University’s Assembly Hall basketball court.

The Indiana Court of Appeals in 2004 unanimously upheld a decision by Hamilton Circuit Judge Judith S. Proffitt ordering Hilbert to repay the stock loan money. The debt stems from company-backed loans Hilbert received in the late 1990s to buy Conseco stock, which became worthless during its bankruptcy reorganization in 2003.

Proffitt ordered Hilbert to pay an amount equal to the interest that Conseco had paid on Hilbert’s behalf on more than $162 million he borrowed to buy company stock.

The loan program was created in 1996 at Hilbert’s direction, and more than 150 employees participated in it, with Hilbert the largest borrower. The loans are now prohibited by federal law.

Since emerging from bankruptcy, Conseco has tried to recover the full debt of the largest 11 borrowers.

Hilbert has said he is effectively broke, but Conseco attorneys have argued that he sought to avoid repaying the debt by transferring assets to others, including his wife, Tomisue Hilbert.

Hilbert founded the Carmel-based insurance company and was the company’s chairman and chief executive until 2000.