Wednesday, October 04, 2006

irritating rich people

Indianapolis-based insurer Conseco has been in a court battle for three years with its former CEO, Steve Hilbert. Before Conseco's bankruptcy, Hilbert borrowed something like $150 million dollars from the company to buy Conseco stock. When the company collapsed (Hilbert's fault, depending on who you ask), Conseco tried to collect the money Hilbert owed; Steve has managed to delay everything in court for three years and counting. Conseco claims that he now owes $155 million dollars in principal, and $135 million dollars in interest.

The most recent skirmish ended yesterday when the U.S. Supreme Court refused to hear Hilbert's appeal of a lower-court ruling. The ruling in question stated that Conseco could try to collect the money from Hilbert's wife Tomisue, because the court believed that he had given her huge piles of cash to shield it from his creditors.

My favorite part of this? Tomisue Hilbert's attorney played the sexism card. I quote: "Tomisue Hilbert does not owe Conseco a dime. Inherent in Conseco's claims against Mrs. Hilbert is that a wife brings no value to the marriage and is not entitled to any property of the marital estate. This is, of course, not true and contrary to law and the society we live in today." I want to make sure I understand the Hilberts' legal argument here. Steve made, essentially, 100% of the income of their marriage; she quit dancing topless when she started dating him. And, as his partner, half of the money is hers. But when he accrues around $280 million dollars in debt (by essentially making bad loans to himself), the debt is all his and not hers. I don't think they actually believe they'll get away with this, but it gives them a few more years of the high life while their lawyers fight the battle....

In case you're curious, Steve Hilbert met Tomisue (his sixth wife, btw) when she jumped out of a cake at his birthday party. I'm not kidding. Business Week tells the whole Conseco story in short form here.

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