WACO, Texas, Aug. 08, 2016 (GLOBE NEWSWIRE) -- H. Thomas Moran, II, Chapter 11 Trustee for Life Partners Holdings Inc. (LPHI), is clarifying for LPHI creditors that the “Investor Plan” proposed by Moran and the Official Committee of Unsecured Creditors in the Life Partners bankruptcy case is the only plan being recommended by all of the Court-appointed fiduciaries, each of whom has a legal responsibility to protect creditors’ financial interests in the case.
Moran noted that the Third Amended Joint Plan of Reorganization ("Investor Plan”) has been distributed for consideration by all of the creditors in the LPHI bankruptcy proceedings. Ballots were sent last month to the creditors and must be received by the bankruptcy administrator no later than August 23rd. For more information, please visit www.LPHITrustee.com.
“This is an extremely complex case, with multiple competing interests and complicated legal issues involved, but we have labored to preserve the assets and to put together a plan that maximizes distribution to the creditors,” said Moran, a well-respected expert who has devoted his entire career to the insurance industry. “The plan we have submitted was created with input from investors, designed for their maximum benefit and flexibility, and will be overseen by folks who are walking in their shoes.”
The Investor Plan is the only one submitted to creditors for approval that achieves three crucial objectives:
- Creates the necessary structure to maximize financial recovery for investors;
- Is flexible enough to offer multiple options so investors can select the one that works best for their individual circumstances; and
- Will be implemented and monitored by an oversight board that includes fellow investors/creditors.
The Investor Plan will be implemented in partnership with Vida Capital, Inc., an industry-recognized expert in life settlements and Registered Investment Adviser (RIA) recently listed among Barron’s 2016 Top 100 Funds. Vida manages more than $1 billion of equity capital in life settlements assets and services more than $2 billion in face value of life insurance policies. Vida has committed to providing the necessary capital to LPHI so funds can be distributed to fractional holders as soon as possible.
“Vida Capital is pleased to be a part of the Investor Plan, the goal of which is to maximize the return of capital to the creditors without delay,” said Dan Young, vice president of portfolio management at Vida Capital. “We look forward to confirmation of the Investor Plan and to working hard on behalf of the creditors to this end.”
“The Investor Plan makes the most sense for three reasons,” said John Mitchell, CPA, an LPI investor who recently reviewed both competing plans that have been proposed. “First, the trustee recommends working with Vida Capital over Transparency, which is important because the trustee knows all the details and has a fiduciary duty to do what's best for the investors. Second, Vida is one of the top three companies in the life settlement industry in terms of size and has a sterling reputation. Third, the Investor Plan is less expensive and all of the work will be done with existing staff at Vida and Life Partners, as opposed to outsourcing the work, as is the case with the other plan. To me, choosing the Investor Plan proposed by the trustee and the creditors’ committee is a no-brainer.”
The bankruptcy case includes Life Partners Inc. (LPI), a Waco, Texas-based company, which sold its 22,000 investors fractional positions relating to life insurance policies it had purchased from consumers. In December 2014, the U.S. Securities and Exchange Commission (SEC) secured a court order for Life Partners and its senior executives to pay more than $46.8 million for engaging in “serious violations” of the securities laws that “deprived the investing public of the information it needed to make a fully informed decision about whether to invest in Life Partners.”
In the aftermath of that judgment, the company’s former management put the company in bankruptcy in the Northern District of Texas (Fort Worth Division, Case No. 15-40289-RFN-11). The SEC and the U.S. Trustee’s Office, a Justice Department office that monitors bankruptcy cases, each requested the appointment of a Chapter 11 Trustee who would be totally independent of prior management. In March 2015, the U.S. Trustee appointed Moran, tasking him with the legal duty of stepping in to assume temporary control over the assets and business operations of the company, and to develop a plan of reorganization.
“It’s important that creditors understand the Investor Plan is the only plan that has been endorsed by individuals who have a legally binding obligation to act in the best interests of the LPI investors and other creditors in this case,” said Moran. “Any competing plan they may hear about was created by individuals who are not bound by those same fiduciary responsibilities under the Court’s supervision.”
About the Investor Plan
The Investor Plan in the Life Partners bankruptcy proceedings is the plan developed and presented by H. Thomas Moran, II, Chapter 11 Trustee, and the Official Committee of Unsecured Creditors. For more information, please go to www.LPHITrustee.com.