The Indiana Court of Appeals yesterday upheld an $8 million judgment that Conseco Inc. won against former director James D. Massey, who once was president of Merchants National Bank in Indianapolis.
In the 3-0 decision, the court agreed with Hamilton County Judge Steve Nation, who declared that Massey still owed Conseco for $8 million in interest accrued on stock loans. Conseco had paid the interest on Massey’s behalf for company-backed loans that Massey used to buy Conseco stock in the late-1990s.
Massey was a director of the Carmel-based insurance company from 1994 until December 2000.
Conseco also has a case pending in Illinois for the $15 million in principal Massey borrowed.
Massey is one of 11 former directors and officers Conseco has pursued in court to recover hundreds of millions of dollars they borrowed but never repaid. The group faced paying the loans out of their own pockets when Conseco’s stock became worthless upon the company’s filing for bankruptcy reorganization in December 2002.
The biggest borrower was Conseco’s co-founder and former CEO, Stephen C. Hilbert. He appealed an $80 million judgment against him to the U.S. Supreme Court, which declined to hear the case.
Hilbert settled with Conseco in December 2006. Conseco has settled with nine of the 11 borrowers. Massey and Ohio attorney Dennis E. Murray Sr. are still battling Conseco’s attempts to collect the debt.