He's held off Conseco's attorneys longer than anyone else. And if he can get to a jury, he's confident he can win.
Dennis E. Murray Sr., a colorful trial lawyer from Ohio, likely will be the last man standing in Conseco's 3-1/2-year assault on a group of its former directors and officers who failed to repay hundreds of millions of dollars borrowed to buy Conseco stock.
The Carmel-based insurance firm has settled with nine of the 11 borrowers in that group. So it now is zeroing in on the remaining two: Murray and James D. Massey, a former president of Indianapolis-based Merchants National Bank.
Massey, 71, is appealing an $8 million judgment against him, issued by Hamilton Superior Court Judge Steve Nation, for interest on the loans that Conseco paid on Massey's behalf.
But Murray has yet to be touched at all. The 66-year-old avid rider of roller coasters at Ohio's Cedar Point amusement park has stared down Conseco. Conseco attorneys are working up yet another set of briefs to answer his claims.
Conseco claims Murray owes it more than $150 million in loans and interest. Murray took out the company-backed bank loans in the late 1990s when Conseco's stock was flying high. But the insurer spiraled into bankruptcy in 2002, rendering its stock worthless.
After settling with the banks in its bankruptcy reorganization, Conseco then sued the 11 largest stock loan borrowers. Last November-a few weeks before the largest borrower, Conseco co-founder Stephen Hilbert, settled for an undisclosed amount-the company estimated its collection efforts would reap nearly $54 million.
Murray, who is also a certified accountant, is no stranger to corporate showdowns and nitty-gritty financial disputes. He has built his career on class-action lawsuits against corporations. His Web site lists one of his practice areas as "bad faith insurance company litigation."
Murray's court battle with Conseco has ranged from Illinois to New York to Indiana. It has been bogged down by a bevy of motions filed by Conseco and frequent requests from Murray's attorney, Henry J. Price, for more time. Conseco also slowed itself down when it tried to end Murray's case on a legal technicality known as the "two-dismissal rule."
"He believes his position is totally well taken, and he wants to have his position heard before a court," Price said of Murray. Murray did not return phone messages left at his Sandusky, Ohio, law office, where he is a partner in his familyrun firm.
But Reed Oslan, an attorney for Conseco, said Murray has won nothing except delays.
"They seem to file a lot of motions that don't advance the merits of their case and are clearly designed to slow down the process," Oslan said. "If they're so confident, why is it that they are seeking, constantly, to delay the process?"
While most of the borrowers that have settled were Conseco employees, Murray and Massey were outside directors. Therefore, Murray claims, he was a victim of alleged fraud committed by the company's leaders.
Murray asserts that Conseco leaders misled him and investors about losses it was sustaining from its 1998 acquisition of Green Tree Financial Corp., a mobile home lender. Because of those false statements, Murray argues, he retained and even bought more shares of Conseco stock.
In early 2000, Conseco restated its 1999 earnings, reducing them by $350 million. It said it had overvalued some of Green Tree's loans, an increasing number of which were delinquent or in default. The company's shares continued to plunge and CEO Hilbert was forced out.
Conseco was sued by dozens of shareholders and eventually paid $120 million to settle their claims.
But even if Conseco committed fraud, all its liability was absolved during the company's bankruptcy reorganization, Conseco attorneys claim. They are confident they can defeat Murray's fraud claim because Nation rejected it when Massey asserted it in his court.
Price is attorney for both Murray and Massey.
"We don't see any possibility of losing," Oslan said. He added that because Murray and Massey have not settled earlier, Conseco now has no incentive to give them favorable terms.
Both Murray and Massey have discussed a settlement, Oslan said, but only Massey has done so recently.
But Price said Murray's fraud claim would be persuasive, "once the jury hears that Conseco was dishonest."
None of the loan cases has been tried before a jury.
Price also is confident Murray will be absolved because he signed an agreement under which the company pledged to protect him from lawsuits over the stock loan program. Conseco attorneys say the company didn't agree to provide that protection.
Murray's other claims are similar to those argued unsuccessfully by attorneys for Hilbert. He claimed he owed Conseco little or nothing because the company's bankruptcy triggered a change-in-control provision in the loan program, which nullified his debt. Hilbert also argued the loans were illegal and therefore could not be enforced.
After Conseco's stock loans ceased, the U.S. Securities and Exchange Commission outlawed such programs.