Conseco Inc. already has won an $80 million judgment against Stephen Hilbert, a ruling the U.S. Supreme Court let stand this fall. Through the threeyear legal battle, attorneys for the two sides lambasted one another. Bad blood abounds.
You ain't seen nothin' yet. Next month, in addition to staging a sheriff's sale of Hilbert's $20 million Carmel mansion, once the site of the states's most lavish parties, the company plans to call Hilbert to the stand and accuse him of contempt of court.
It all stems from comments Hilbert made in Hamilton County court in November 2004, a sometimes-testy 40-minute appearance during which he said he had few valuable assets beyond the mansion.
At the time, Hilbert submitted a list of personal property, collectively worth more than $5 million, which he agreed to sell, with proceeds placed in escrow. In return, Hamilton Circuit Judge Judith Proffitt put on hold her massive judgment against him.
On the stand, Hilbert said, "That is, to the best of my knowledge, all the personal property that I own."
In fact, Conseco says, Hilbert had other assets, including property in a Boone County warehouse and on the Caribbean island of St. Martin. In court filings over the past year, the company says Hilbert presented "false and misleading" testimony, which it characterized as "perjury."
It's a ridiculous charge, say attorneys for Hilbert, 60, Conseco's founder.
They say Conseco understood that the list included just Hilbert's assets in Hamilton County, which are the only ones the county sheriff's department would have been authorized to seize and auction had Proffitt not stayed her judgment.
In any case, Conseco had long known Hilbert had property in Boone County and St. Martin, much of it of modest value, Hilbert's attorneys say. Items included a 10-year-old car, scuba gear and used furniture.
"There was no attempt to mislead anyone," said Phil Fowler, a Bingham McHale attorney representing Hilbert. "Conseco itself was not confused. To suggest otherwise is simply preposterous."
In court papers, they added: "The [contempt] motion represents a new low in civility."
The contempt hearing is scheduled for Dec. 1. Conseco wants Proffitt to make Hilbert reveal all assets and sell what he promised he'd unload but hasn't, and to dole out other sanctions.
On the offensive
As they fight Conseco's contempt of court motion, attorneys for Hilbert have filed one of their own.
Last month, they charged Conseco flouted a confidentiality order by publicly filing court papers disclosing details of Carmel-based MH Equity, a private equity firm launched a year ago by Hilbert and his wife, Tomisue.
In the filing, Conseco called the ownership and compensation structure of MH "a sham" intended to keep assets beyond its reach-an allegation attorneys for the Hilberts deny.
Under a confidentiality order issued by Proffitt, filings disclosing the Hilberts' private financial affairs should have been submitted under seal, the couple's attorneys allege.
"Conseco and its attorneys willfully disregarded the ... order in an effort to smear the reputations of Mrs. Hilbert and Mr. Hilbert in the media ... rather than try their claims in the court of law."
Conseco counters that it gathered information on MH from numerous public records not covered by the confidentiality order. Further, the company noted that information Hilbert's attroneys contend was private already had appeared in IBJ stories.
MH-backed by up to $400 million from John Menard, the billionaire founder of the home-improvement chain-so far has struck two high-profile deals.
In late summer, it bought locally based Sunshine Holdings, which owns Australian Gold, a maker of tanning lotions; ETS Inc., a maker of tanning beds; and Helios, which makes tanning salon software.
Late last year, it pumped $15 million into New Jersey-based Orbcomm Inc., which operates a satellite-based system that allows companies to track trucks, utility meters and other assets.
This month, Orbcomm went public at $11 a share, then plunged 30 percent in its first day of trading, closing at $7.75. The first-day performance was the worst of any U.S. IPO this year.
Despite the slide, Securities and Exchange Commission filings show MH is still in the black on its investment.
The private equity firm purchased preferred stock in Orbcomm that receives a 12-percent annual dividend. It has the option of converting the preferred stock into 3.7 million common shares. With Orbcomm shares now trading for nearly $8 apiece, that stake is worth more than $19 million.