Larry Coss, the controversial founder and leader of Green Tree Financial in the 1980s and 1990s, has died of cancer at age 75.
Coss gained notoriety as the nation’s highest-paid CEO in the mid-1990s. He made about $65 million in 1995 and was paid more than $100 million in cash and stock in 1996. He returned some of the money after his board of directors, under shareholder pressure, altered his bonus formula.
Coss also fought lawsuits over the years pursued by former financial partners, federal regulators and shareholders. One suit, which Green Tree settled with federal regulators for tens of millions in 1992, was brought by the failed Midwest Federal Savings and Loan.
Coss and former Midwest Federal Savings CEO Hal Greenwood created Green Tree in the early 1980s and spun it off as a public company. Midwest was a big lender and investor in Green Tree until the savings and loan got in financial trouble and was seized by federal regulators. The thrift’s failure cost taxpayers hundreds of millions to cover federally insured depositors, and Greenwood went to prison.
Federal prosecutors said during the criminal trial that Green Tree simply had gotten the upper hand in business dealings with Midwest Federal and that the taxpayer claims would be resolved in civil court, which they were in 1992.
Coss increasingly turned to Wall Street to finance his loans. Green Tree became a pioneer of the “loan securitization” business that also helped drive the growth of Wall Street but also burned some investors who claimed they were misled about the quality of the loan packages they were buying.
Among them was Conseco Financial, which took over Green Tree in a 1998 buyout. Conseco later went bankrupt and blamed the high delinquency rate of Green Tree’s portfolio.
Conseco had to write off about $1.5 billion in Green Tree assets, erasing Green Tree’s before-tax profits for 1995 to 1997. Conseco stock dropped 90 percent in value. Coss, who had remained on the company’s board, saw his Conseco shares fall in value from $260 million in 1998 to about $25 million in 2000. Conseco filed for bankruptcy in 2002.
Coss, a former car salesmen, was known as a hard-charging executive. However, associates said, he mellowed in retirement.
Brian Short, a former federal magistrate retained to mediate among shareholders, the government and Green Tree in the early 1990s, said he came to admire Coss for his philanthropy.
“He could be a very caring guy,” Short said. “He was smart. He understood securitization. He sold Green Tree to Conseco and made the shareholders a bunch of dough. Larry paid off his stock loans after the Conseco stock [crashed in value]. I didn’t know him in business. But he was a person of integrity, in my view.”
Short, who also was chairman of Catholic Charities, said that after the settlements Coss asked to bring his children to visit several agencies that served impoverished citizens. Short said Coss gave millions to Catholic Charities, Catholic schools for scholarships and to assist people in need.
After the Green Tree sale to Conseco, Coss, a legal resident of South Dakota, split time between his home on Sunfish Lake near St. Paul and his South Dakota ranch.
“We seldom talked business,” said Brent Baskfield, a neighbor and friend who served on the Coss Family Foundation. “We’d go pheasant hunting in South Dakota, and I was able to see Larry as a common man with uncommon skills. He was very smart and came up without privilege and built a multibillion-dollar company.”
Coss is survived by his wife, Virginia; several children and grandchildren. Visitation will be at O’Halloran & Murphy Funeral Home in St. Paul on Thursday from 4 to 8 p.m. Services will be held at the Church of the Assumption in St. Paul on Friday at 10 a.m. followed by interment at St. Peter’s Church cemetery in Mendota.