Conseco Finance deteriorates as buyers sought

ST. PAUL (AP) -- Conseco Finance Corp. officials are remaining optimistic about finding a buyer for the troubled company.

But some outside observers aren't so sure.

"I think they're a sitting duck at this point," said Matthew Park, a consumer finance analyst for Thomas Weisel Partners. "If you're going to buy any of Conseco Finance's business, you'll swallow poison. Companies have to decide if they have the stomach for that. Very few have."

Conseco Finance is the nation's largest mobile home lender. It also makes home equity, home improvement, credit card and other consumer loans typically to people with poor credit histories.

As of late, business has soured.

In a tough market for mobile-home sales, Conseco Finance is trying to sell nearly 19,000 of them -- units repossessed as owners fell behind on payments. Conseco Finance has halted much of its lending and is trying to conserve cash.

The St. Paul-based financing arm of Indiana-based Conseco Inc., is trying to avoid bankruptcy and recently laid off about 140 employees, including about 40 in St. Paul.

"That company is no longer a viable business the way it is standing," said Doug Hansen, vice president of Omaha, Neb.-based Nu-Trend Homes, a manufactured-home dealer that has worked with Conseco Finance for more than 20 years.

Some analysts and observers expect a bankruptcy filing as early as this week. But bankruptcy or foreclosure wouldn't rule out a sale of the finance company.