Exhibit 10.14
Form 906 Department of the Treasury-Internal Revenue Service
(Rev. August 1994)
Closing Agreement On Final Determination
Covering Specific Matters
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Under section 7121 of the Internal Revenue Code Conseco, Inc.
(EIN: ▇▇-▇▇▇▇▇▇▇) and Subsidiaries as successor in interest to Conseco, Inc.
(EIN: ▇▇-▇▇▇▇▇▇▇) and Subsidiaries, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Carmel, Indiana 46032,
(Taxpayer's name, address, and identifying number)
and the Commissioner of Internal Revenue make the following closing agreement:
WHEREAS, Conseco, Inc. ("Conseco") is the common parent corporation of an
affiliated group of corporations that file a consolidated tax return that
included Conseco Finance Corporation (CFC) for years prior to 2003. The
affiliated group used a calendar year.
WHEREAS, Conseco acquired the stock of Green Tree Financial Corporation (Green
Tree) on July 1, 1998. Conseco paid approximately $6 billion for Green Tree in a
stock for stock transaction. Conseco changed Green Tree's name to CFC.
WHEREAS, after being acquired by Conseco, Green Tree/CFC began experiencing
financial difficulties. At about the same time, Conseco, itself, also
experienced financial difficulties. Conseco owned all of CFC's preferred stock;
another Conseco subsidiary, Conseco Investment Holding Corp. (CIHC), owned all
of CFC's common stock.
WHEREAS, in December 2002, Conseco, CIHC and CFC filed for bankruptcy.
Ultimately, CFC transferred all of its assets to a liquidating trust, and CFC
has ceased existence. Both Conseco and CIHC have emerged from bankruptcy.
WHEREAS, Conseco, Inc. requested a Pre-Filing Agreement ("PFA") under Rev. Proc.
2001-22, 2001-1 C.B. 745 on October 23, 2003, which the IRS accepted.
WHEREAS, one issue in the PFA application which was accepted by the IRS was
whether Conseco and Conseco Life Insurance Company of Texas (formerly Conseco
Investment Holding Corporation, "CLTX") recognized an ordinary loss under
Section 165(g) on September 15, 2003, with respect to the stock of Conseco
Finance Corporation ("CFC").
WHEREAS, another issue in the PFA application which was accepted by the IRS was
whether the Section 165(g) (3) loss deduction is available to offset future
taxable income of the Conseco consolidated group, principally the income
reported by ▇▇▇▇▇▇▇'s life insurance subsidiaries. The parties have not reached
agreement on this specific issue. This closing agreement does not resolve that
issue.
NOW IT IS HEREBY DETERMINED AND AGREED THAT:
1. The Preferred stock of CFC held by ▇▇▇▇▇▇▇ became a "worthless security"
during the taxable year ended December 31, 2003, for purposes of Section
165(g);
2. The Common stock of CFC held by CIHC became a "worthless security" during
the taxable year ended December 31, 2003, for purposes of Section 165(g);
3. The loss on the worthlessness of the CFC Preferred and Common stock shall
be treated as an ordinary loss pursuant to Section 165(g)(3); and
4. The loss on the worthlessness of the CFC Preferred stock is $750,000,000
and the loss on the worthlessness of the CFC common stock is
$5,932,664,998.
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Catalog Number 16961A Form 906 (Rev. 8-1994)
Instructions
This agreement be signed and filed in triplicate. (All copies must have original
signatures.) The original and copies of the agreement must be identical. The
name of the taxpayer must be stated accurately. The agreement may relate to one
or more years.
If an attorney or agent signs the agreement for the taxpayer, the power of
attorney (or a copy) authorizing that person to sign must be attached to the
agreement. If the agreement is made for a year when a joint income tax return
was filed by a husband and wife, it should be signed by or for both spouses. One
spouse may sign as agent for the other if the document (or a copy) specifically
authorizing that spouse to sign is attached to the agreement.
If the fiduciary signs the agreement for a decedent or an estate, an attested
copy of the letters testamentary or the court order authorizing the fiduciary to
sign, and a certificate of recent date that the authority remains in full force
and effect must be attached to the agreement. If a trustee signs, a certified
copy of the trust instrument or a certified copy of extracts from that
instrument must be attached showing:
(1) the date of the instrument;
(2) that it is or is not of record in any court;
(3) the names of the beneficiaries;
(4) the appointment of the trustee, the authority granted, and other information
necessary to show that the authority extends to Federal tax matters; and
(5) that the trust has not been terminated, and that the trustee appointed is
still acting. If a fiduciary is a party, Form 56, Notice Concerning Fiduciary
Relationship, is ordinarily required.
If the taxpayer is a corporation, the agreement must be dated and signed with
the name of the corporation, the signature and title of an authorized officer or
officers, or the signature of an authorized attorney or agent. It is not
necessary that a copy of an enabling corporate resolution be attached.
Use additional pages if necessary, and identify them as part of this agreement.
Please see Revenue Procedure 68 16, C.B. 1968 1, page 770, for a detailed
description of practices and procedures applicable to most closing agreements.
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Catalog Number 16961A Form 906 (Rev. 8-1994)
This agreement is final and conclusive except:
(1) the matter it relates to may be reopened in the event of fraud, malfeasance,
or misrepresentation of material fact;
(2) it is subject to the Internal Revenue Code sections that expressly provide
that effect be given to their provisions (including any stated exception for
Code section 7122) notwithstanding any other law or rule of law; and
(3) if it relates to a tax period ending after the date of this agreement, it is
subject to any law, enacted after the agreement date, that applies to that tax
period.
By signing, the above parties certify that they have read and agreed to
the terms of this document.
Your signature Date Signed
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Spouse's signature (if a joint return was filed) Date Signed
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Taxpayer's representative Date Signed
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Taxpayer (other than individual)
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By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Date Signed 8/25/2004
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Title Senior Vice President, Corporate Tax
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Commissioner of Internal Revenue
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ Date Signed 9/7/2004
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Title DFO-LMSB, NR&C
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Catalog Number 16961A Form 906 (Rev. 8-1994)
I have examined the specific matters involved and recommend I have reviewed the specific matters involved and recommend
the acceptance of the proposed agreement. approval of the proposed agreement.
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(Receiving Officer) (Date) (Reviewing Officer) (Date)
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(Title) (Title)
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Catalog Number 16961A Form 906 (Rev. 8-1994)