Life Partners investors to get more than $100 million from policies

By Caroline Salls

Pittsburgh, Dec. 13 – Life Partners Holdings Inc. Chapter 11 trustee H. Thomas Moran II gave an update on distributions to be made to creditors now that the company’s plan of reorganization has taken effect.

“Within the next two weeks, distributions of more than $100 million collected from matured policies during the bankruptcy proceedings will be distributed to investors,” Moran said in a news release.

“Going forward, we project that investors will receive roughly 90% of their invested capital over time as a result of the plan we were able to put in place – depending on the option they elected.”

As previously reported, the plan filed in conjunction with the official committee of unsecured creditors appointed in Life Partners’ Chapter 11 case took effect on Dec. 9.

“This is a momentous day for the investors in Life Partners as it means they will now begin recovering a substantial amount of their original principal investments,” Moran said in the release.

The court-approved reorganization plan preserved the Life Partners $2.4 billion portfolio of life insurance policies, which includes $1.4 billion of investor capital still at risk.

The plan created two new entities, including the Position Holder Trust and the Creditors’ Trust. The Position Holder Trust will be headed by Eduardo S. Espinosa of Dykema Cox Smith and will oversee the liquidation of the policy portfolio and distribution of the net proceeds to investors. The Creditors’ Trust, which will be headed by Alan M. Jacobs of AMJ Advisors, will pursue litigation arising from the Life Partners’ pre-bankruptcy business activities for the benefit of Life Partners’ investors.

The plan allowed investors to select among various options for the recovery of their capital, including options that enable them to avoid exposure to any future financial commitments or to tie their future returns to individual policies still active in the company portfolio.

Waco, Texas-based Life Partners is engaged in the secondary market for life insurance. The company filed for bankruptcy on May 20, 2015 in the U.S. Bankruptcy Court for the Northern District of Texas under Chapter 11 case number 15-40289.

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