sc13da401874127_05192008.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)

(Amendment No. 4)1

Conseco, Inc.
(Name of Issuer)

Common Stock, par value $0.01
(Title of Class of Securities)

208464883
(CUSIP Number)

STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

May 19, 2008
(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.


_______________
1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
CUSIP NO. 208464883
 
1
NAME OF REPORTING PERSON
 
STEEL PARTNERS II, L.P.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
18,144,661
8
SHARED VOTING POWER
 
- 0 -
9
SOLE DISPOSITIVE POWER
 
18,144,661
10
SHARED DISPOSITIVE POWER
 
- 0 -
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
18,144,661
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
¨
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.8%
14
TYPE OF REPORTING PERSON
 
PN

2
CUSIP NO. 208464883
 
1
NAME OF REPORTING PERSON
 
STEEL PARTNERS II GP LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
18,144,661
8
SHARED VOTING POWER
 
- 0 -
9
SOLE DISPOSITIVE POWER
 
18,144,661
10
SHARED DISPOSITIVE POWER
 
- 0 -
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
18,144,661
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
¨
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.8%
14
TYPE OF REPORTING PERSON
 
OO

3
CUSIP NO. 208464883
 
1
NAME OF REPORTING PERSON
 
STEEL PARTNERS II MASTER FUND L.P.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
18,144,661
8
SHARED VOTING POWER
 
- 0 -
9
SOLE DISPOSITIVE POWER
 
18,144,661
10
SHARED DISPOSITIVE POWER
 
- 0 -
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
18,144,661
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
¨
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.8%
14
TYPE OF REPORTING PERSON
 
PN

4
CUSIP NO. 208464883
 
1
NAME OF REPORTING PERSON
 
STEEL PARTNERS LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
18,144,661
8
SHARED VOTING POWER
 
- 0 -
9
SOLE DISPOSITIVE POWER
 
18,144,661
10
SHARED DISPOSITIVE POWER
 
- 0 -
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
18,144,661
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
¨
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.8%
14
TYPE OF REPORTING PERSON
 
OO

5
CUSIP NO. 208464883
 
1
NAME OF REPORTING PERSON
 
WARREN G. LICHTENSTEIN
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
18,144,661
8
SHARED VOTING POWER
 
- 0 -
9
SOLE DISPOSITIVE POWER
 
18,144,661
10
SHARED DISPOSITIVE POWER
 
- 0 -
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
18,144,661
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
¨
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.8%
14
TYPE OF REPORTING PERSON
 
IN

6
CUSIP NO. 208464883
 
1
NAME OF REPORTING PERSON
 
JACK L. HOWARD
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -**
8
SHARED VOTING POWER
 
- 0 -
9
SOLE DISPOSITIVE POWER
 
- 0 -**
10
SHARED DISPOSITIVE POWER
 
- 0 -
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
- 0 -**
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
¨
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
- 0 -**
14
TYPE OF REPORTING PERSON
 
IN

** See Item 5.
 
7
CUSIP NO. 208464883
 
The following constitutes Amendment No. 4 to the Schedule 13D filed by the undersigned (“Amendment No. 4”).  This Amendment No. 4 amends the Schedule 13D as specifically set forth.
 
Item 3.
Source and Amount of Funds or Other Consideration.
 
Item 3 is hereby amended and restated to read as follows:
 
The aggregate purchase price of the 18,144,661 Shares owned by Steel Partners II is approximately $259,106,437, including brokerage commissions.  The Shares owned by Steel Partners II were acquired with partnership funds.
 
Steel Partners II effects purchases of securities primarily through margin accounts maintained for it with prime brokers, which may extend margin credit to it as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules and the prime brokers’ credit policies.  In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.
 
Item 4.
Purpose of Transaction.
 
Item 4 is hereby amended to add the following:
 
On May 19, 2008, Steel Partners II delivered a letter to the Issuer expressing its interest in purchasing, with the Issuer’s support, additional Shares without exceeding ownership in excess of 22% of the outstanding Common Stock.  Steel Partners II believes, based on the Issuer’s public filings, that it can increase its percentage ownership up to 22% of the outstanding Common Stock without limiting the Issuer’s ability to fully realize the benefits of its net operating loss carryforwards.  Steel Partners II is not permitted to acquire 10% or more of the outstanding Shares without first complying with applicable insurance holding company filing requirements.  Steel Partners II requested the Issuer to advise the insurance regulators that it will not object to Steel Partners II’s increased ownership when contacted by the regulators.  Steel Partners II also stated that it believes the Board has been slow to implement the strategic review process and that return on equity of Conseco Insurance Group is inadequate and needs to be improved as quickly as possible.  A copy of this letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
Item 5.
Interest in Securities of the Issuer.
 
Item 5(a) is hereby amended and restated to read as follows:
 
(a)           The aggregate percentage of Shares reported owned by each person named herein is based upon 184,655,525 Shares outstanding, which is the total number of Shares outstanding as of April 29, 2008 as reported in the Issuer’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 9, 2008.
 
As of the close of business on May 16, 2008, Steel Partners II beneficially owned 18,144,661 Shares, constituting approximately 9.8% of the Shares outstanding.  By virtue of their relationships with Steel Partners II discussed in further detail in Item 2, each of Steel GP LLC, Steel Master, Partners LLC and Warren G. Lichtenstein may be deemed to beneficially own the Shares owned by Steel Partners II.
 
8
CUSIP NO. 208464883
 
Jack Howard does not directly own any Shares.  Mr. Howard, as a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the 18,144,661 Shares owned by Steel Partners II.  Mr. Howard disclaims beneficial ownership of such Shares.
 
Item 5(c) is hereby amended to add the following:
 
(c)           Schedule A annexed hereto lists all transactions in the Shares by the Reporting Persons since the filing of Amendment No. 3 to the Schedule 13D.  All of such transactions were effected in the open market.
 
Item 6.
Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
 
Item 6 is hereby amended to add the following:
 
As of the close of business on May 16, 2008, Steel Partners II did not own any derivative securities of the Issuer.
 

Item 7.
Material to be Filed as Exhibits.
 
Item 7 is hereby amended to add the following exhibit:
 
99.1           Letter to the Issuer, dated May 19, 2008.
 
 
9
CUSIP NO. 208464883
 
SIGNATURES
 
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
 
Dated:  May 19, 2008
STEEL PARTNERS II, L.P.
   
 
By:
Steel Partners II GP LLC
General Partner
   
 
By:
/s/ Lauren Isenman
   
Lauren Isenman
as Attorney-In-Fact for Warren G. Lichtenstein,
Managing Member


 
STEEL PARTNERS II GP LLC
   
 
By:
/s/ Lauren Isenman
   
Lauren Isenman
as Attorney-In-Fact for Warren G. Lichtenstein,
Managing Member


 
STEEL PARTNERS II MASTER FUND L.P.
   
 
By:
Steel Partners II GP LLC
General Partner
   
 
By:
/s/ Lauren Isenman
   
Lauren Isenman
as Attorney-In-Fact for Warren G. Lichtenstein,
Managing Member


 
STEEL PARTNERS LLC
   
 
By:
/s/ Lauren Isenman
   
Lauren Isenman
as Attorney-In-Fact for Warren G. Lichtenstein,
Manager


 
/s/ Lauren Isenman
 
LAUREN ISENMAN
as Attorney-In-Fact for Warren G. Lichtenstein

 
 
/s/ Jack L. Howard
 
JACK L. HOWARD
 
 
10
CUSIP NO. 208464883
 
SCHEDULE A
 
Transactions in the Securities of the Issuer Since the Filing of Amendment No. 3 to the Schedule 13D
 
Class of
Security
Securities
Purchased
 
Price ($)
Date of
Purchase

STEEL PARTNERS II, L.P.
 
Common Stock
100,000
  
10.3777
  
03/25/08
Common Stock
100,000
  
10.4929
  
03/25/08
Common Stock
100,000
  
10.4844
  
03/25/08
Common Stock
100,000
  
10.4053
  
03/26/08
Common Stock
500,409
  
10.5756
  
03/26/08
Common Stock
8,211
  
10.4678
  
04/25/08
Common Stock
41,300
  
10.6570
  
04/25/08
Covered Short Put Position
($10.00 Strike Price)
3,010
  
0.4500
  
04/28/08
Common Stock
115,300
  
10.9022
  
04/28/08
Common Stock
300
  
11.0000
  
04/30/08

STEEL PARTNERS II GP LLC
 
None
 
STEEL PARTNERS II MASTER FUND L.P.
 
None
 
STEEL PARTNERS LLC
 
None
 
WARREN G. LICHTENSTEIN
 
None
 
JACK L. HOWARD
 
None
 
 
11