Life Partners looks to use policy maturity funds as bridge financing

By Caroline Salls

Pittsburgh, Sept. 16 – Life Partners Holdings, Inc.’s Chapter 11 trustee requested court approval to use life insurance policy maturity proceeds and future maturities as post-bankruptcy financing, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the Northern District of Texas.

Specifically, the company wants to use up to $1.6 million of the funds on an interim basis and up to $25 million on a final basis.

Trustee H. Thomas Moran II said $33 million in maturity funds are being held pending a determination by the court regarding their ownership.

Additionally, Moran said there is roughly $174 million of cash surrender value associated with the policies.

According to the motion, the proposed financing will be “used as a bridge loan only to achieve a confirmed plan of reorganization” under Life Partners’ negotiated restructuring.

The funds will be repaid with interest at a rate of 10% on or around the plan effective date.

Waco, Texas-based Life Partners is engaged in the secondary market for life insurance. The company filed for bankruptcy on May 20. Its Chapter 11 case number is 15-40289.

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