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EXHIBIT 8.1
Lehman Brothers Inc. Financial Security Assurance, Inc.
Three World Financial Center 350 Park Avenue
New York, New York 10285 New York, New York 10022
Credit Suisse First Boston Corporation Standard & Poor's Ratings Services
11 Madison Avenue, 5th Floor 55 Water Street
New York, New York 10010-3629 New York, New York 10041
Merrill Lynch, Pierce, Fenner Moody's Investors Service, Inc.
& Smith Incorporated 99 Church Street
North Tower, 10th Floor New York, New York 10007
World Financial Center
New York, New York 10281 U.S. Bank Trust National Association
180 East Fifth Street
First Union Securities, Inc. Saint Paul, Minnesota 55101
410 Park Avenue, 14th Floor
New York, New York 10022
June 28, 2000
Re: Conseco Finance Corp./Conseco Finance Securitizations Corp.
Certificates for Home Equity Loans, Series 2000-D
Ladies and Gentlemen:
We have acted as counsel for Conseco Finance Corp., a Delaware corporation
("Conseco"), Conseco Finance Securitizations Corp., a Minnesota Corporation
("CFSC") and Conseco Finance Corp.--Two ("GTFC"), a Minnesota corporation which
is wholly owned by Conseco, in connection with the establishment by CFSC of
Conseco Finance Home Equity Loan Trust 2000-D (the "Trust"), pursuant to a
Pooling and Servicing Agreement dated as of June 1, 2000 (the "Pooling and
Servicing Agreement"), among Conseco, CFSC and U.S. Bank Trust National
Association, as Trustee (the "Trustee"). All undefined capitalized terms used in
this opinion have the meanings given them in the Pooling and Servicing
Agreement.
Pursuant to a Transfer Agreement dated as of June 1, 2000 between Conseco
and CFSC, Conseco will transfer to CFSC the Loans and certain related property.
Pursuant to the Pooling and Servicing Agreement, CFSC will transfer to the Trust
the Loans and certain related property, and the Trustee will issue, upon the
order of CFSC, Certificates representing beneficial interests in the Trust.
Certificates (other than the Class B-2 Certificates) are being offered and sold
<PAGE>
Lehman Brothers Inc.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
First Union Securities, Inc.
Financial Security Assurance, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
U.S. Bank Trust National Association
June 28, 2000
Page 2
to the public by the Underwriters pursuant to the Prospectus dated June 21,
2000, and the related Prospectus Supplement, dated June 21, 2000. The Class C
Certificate represents the residual interest in the Trust and will be issued to
CFSC. At the direction of Conseco, and in consideration for the sale of the
Loans by Conseco to CFSC under the Transfer Agreement, CFSC will transfer to
GTFC the Class C Certificate and the Class B-2 Certificates on the Closing Date.
GTFC expects subsequently to sell the Class B-2 Certificates.
In connection with the transfer of the Class C Certificates and the Class
B-2 Certificates to GTFC, Conseco and CFSC have requested that we provide to you
our opinion whether, in the event Conseco or CFSC became a debtor under the
United States Bankruptcy Code (the "Code"), a court would order that the assets
and liabilities of GTFC be consolidated with those of Conseco or CFSC, as the
case may be, at the request of any creditor of Conseco or CFSC, as the case may
be. In rendering the opinions set forth below, we have reviewed such questions
of law as we deemed necessary, and we have examined GTFC's Articles of
Incorporation and Bylaws and such additional documents as we deemed necessary.
As to matters of fact material to our opinion, we have relied, to the extent we
deemed proper, on certificates of responsible officers of GTFC, Conseco and
CFSC. In addition, we have assumed, with your concurrence, that the facts set
forth in the following numbered paragraphs are, and will remain, accurate:
1. GTFC will comply at all times with all of the provisions of its
Articles of Incorporation (including Articles 3, 5 and 6), and its Bylaws
(including Section 3.10).
2. Each of Conseco, CFSC and GTFC will at all times hold out to the
public, including their respective creditors, that GTFC is a separate and
distinct corporate entity. GTFC will not share a common logo with Conseco
or CFSC and will not be held out as or be considered as a department or
division of Conseco or CFSC. GTFC will conduct its business solely in its
own name so as not to mislead others as to the identity of the company with
which those others are concerned.
3. GTFC will at all times maintain a separate business office from
that of Conseco and from that of CFSC.
<PAGE>
Lehman Brothers Inc.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
First Union Securities, Inc.
Financial Security Assurance, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
U.S. Bank Trust National Association
June 28, 2000
Page 3
4. GTFC will at all times keep corporate records and books of account
separate from those of Conseco and CFSC, and will not commingle any of its
funds or other assets with those of Conseco and CFSC. Other than the
payment of certain of the organizational expenses of GTFC by Conseco, GTFC
will be responsible for the payment of all its losses, obligations and
expenses, and it will be adequately capitalized to conduct its business.
5. At least one of GTFC's directors and one of its executive officers
will not be a director, officer or employee of Conseco or any other
subsidiary or affiliate of Conseco.
6. GTFC's Board of Directors will hold appropriate meetings to
authorize all of GTFC's corporate actions, will keep minutes of its
meetings, will observe all corporate formalities required by state and
federal statutes, regulations and judicial decisions, and will, from time
to time, authorize dividends to be paid to Conseco out of payments it
receives on the Class C Certificates and the Class B-2 and other similar
assets it holds.
7. All transactions and dealings between Conseco and GTFC will be on
such terms and conditions as would be generally available to entities
unaffiliated with Conseco in comparable transactions. All such transactions
have been and will be made only with prior approval of GTFC's Board of
Directors, at arm's length, in good faith, and without the intent to
hinder, delay or defraud creditors of either entity, and transfers between
Conseco and GTFC will not be made if the party making the transfer is
insolvent or would be rendered insolvent by the transfer.
<PAGE>
Lehman Brothers Inc.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
First Union Securities, Inc.
Financial Security Assurance, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
U.S. Bank Trust National Association
June 28, 2000
Page 4
8. All transactions and dealings between CFSC and GTFC will be on such
terms and conditions as would be generally available to entities
unaffiliated with CFSC in comparable transactions. All such transactions
have been and will be made only with prior approval of GTFC's Board of
Directors, at arm's length, in good faith, and without the intent to
hinder, delay or defraud creditors of either entity, and transfers between
CFSC and GTFC will not be made if the party making the transfer is
insolvent or would be rendered insolvent by the transfer.
9. Following the transfer of the Class C Certificates and the Class
B-2 Certificates to GTFC, Conseco and CFSC will disclose all material
transactions associated with the transfer in communications to its
shareholders and in public announcements which will disclose the separate
corporate identity of GTFC and that the assets of GTFC will not be
available for payment of creditors' claims in the event of the insolvency
of Conseco or CFSC.
10. GTFC will not issue any security that accelerates upon the
condition that Conseco or CFSC becomes bankrupt or is placed into
receivership.
Based upon the foregoing, we are of the opinion that, in the event Conseco
or CFSC became a debtor under the Code, a court exercising reasonable judgment
under existing statutes and precedents would not order that the assets and
liabilities of GTFC be consolidated with those of Conseco or CFSC, as the case
may be, based upon any legal theory currently recognized under applicable law
and applicable to the circumstances, including (i) state laws disregarding the
separateness of a corporation and its stockholders or (ii) any equitable
doctrine analogous to the bankruptcy law doctrine of substantive consolidation.
Although we believe this opinion represents a sound application of existing
statutes, regulations and case law, we note that there does not appear to be any
precedent directly on point. We note also that the case law addressing the legal
issues underlying our opinion involves equitable principles applied on a
case-by-case basis in the context of specific facts, and that any determination
by a court as to any particular case will depend on an examination of relevant
law, facts and circumstances at a particular time. A court might reach a
determination contrary to the foregoing
<PAGE>
Lehman Brothers Inc.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
First Union Securities, Inc.
Financial Security Assurance, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
U.S. Bank Trust National Association
June 28, 2000
Page 5
opinions if Conseco, CFSC or GTFC conducts its business contrary to the
assumptions set forth in this opinion. Conseco, CFSC and GTFC have represented
to us that they intend to conduct their respective businesses in accordance with
those assumptions.
We express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States of America and the laws of the State of
Minnesota. This opinion is delivered to you at the request of Conseco and CFSC
solely for your use. This opinion may not be circulated or republished to, or
relied upon by, any other person without our prior written consent.
Very truly yours,
