In what could be the most important showdown for the manufactured housing sector of the ABS market, bondholders - led by a practically defaulted B2 class ABS holder - hope to trump CFN Investment Holdings in the reorganization plan of bankrupt Conseco Finance. At issue is the treatment of the servicing fees for the issuer's MH trust.
Thus far, the only proposal submitted to bankruptcy court is from CFN. CFN would like to increase fees to 125 basis points from the current 50 basis point fee, and make half of the increased fees - 75 basis points - senior in the payment structure. The plan essentially increases profitability of the serving operations, at the expense of subordinated ABS holders.