When Conseco Inc. put its consumer finance unit on the auction block two months ago it had help from longtime ally Lehman Brothers.

But now that Lehman may be assembling a group that could buy the unit, Merrill Lynch & Co. is believed to have been named Conseco's new lead adviser.

The two investment banks have a long history of involvement with Conseco, an insurance giant based in Carmel, Ind. Conseco's performance has stumbled badly since it paid $6.5 billion for Green Tree Financial Corp. in 1998 and made it into a consumer finance division that it is now trying to sell.

Merrill represented Conseco in the purchase of St. Paul-based Green Tree, and Lehman advised Green Tree.

But Conseco's stock has lost more than 90% of its value since the deal was announced as the market failed to support it. Announcing his decision to shed the unit in March, Stephen C. Hilbert, then the company's chairman, cited the finance unit's effect on the stock price.

"It certainly has been a difficult two years for our fellow Conseco shareholders," he said.

Lehman has signed a commitment letter to organize an investor group to buy the unit for $750 million, according to people familiar with the matter. Lehman may or may not be a part of the group, a source close to the investment bank said.

Conseco retains the option to entertain other bids until the middle of June, said a source close to Conseco management. However, a source close to Lehman said there is no deadline in the commitment letter, which he said is nonbinding.

Conseco declined to comment. Officials at Lehman and Merrill did not return phone calls seeking comment.

The Lehman-led group would have to assume $2.2 billion of debt to buy the unit, bringing its total cost to just under $3 billion.

That is much less than the $4.5 billion Mr. Hilbert had said he hoped the unit would fetch.

Mr. Hilbert and Rollin M. Dick, Conseco's former chief financial officer, resigned in late April. David V. Harkins, president of Thomas H. Lee Co., a buyout firm with a large stake in Conseco, was named interim chairman and chief executive.

Green Tree, which specializes in lending against mobile homes, practiced gain-on-sale accounting, a controversial method in which the total profit from a loan is estimated and booked at the time the loan is securitized.

Several times it has had to restate the value of the residual interests it retains from its securitizations - which hit Conseco's bottom line.

This month Lehman agreed to buy $1.5 billion of loans from Conseco finance; $500 million of the proceeds were earmarked to pay off intercompany debt.

The news of Lehman's intent to organize an investor group was reported in Friday's edition of The Wall Street Journal. At midday Friday, Conseco's stock was trading at $4.875, down 2.5% from Thursday's close.

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