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Life Partners Holdings Plan Filed

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Vida Capital filed with the U.S. Bankruptcy Court a Third Amended Joint Chapter 11 Plan and related Disclosure Statement for Life Partners Holdings.

According to documents filed with the Court, “Vida will make an Exit Loan available to pay DIP Claims, Allowed Administrative and Fee Claims and, if necessary, Priority Claims. The Exit Loan will bear simple interest at 13% per annum, and will be re-paid to Vida from Maturity Funds on hand and to be received after the Effective Date by Continuing Holders and the Policy Fund. Vida will also make a loan facility available to the Policy Fund to fund post-Effective Date operations in the event that the Policy Fund runs short on operating capital (which Vida does not expect will occur). To the extent there is sufficient operating capital in the Policy Fund, there will not be a need, or a requirement, to draw on this loan facility.”

The Disclosure Statement continues, “On the Effective Date of the Plan, a Litigation Trust will be formed, the corpus of which (the ‘Litigation Trust Assets’) will be: (i) the Debtors’ Causes of Action against third parties, (ii) causes of action that may be contributed by Claim holders, including, but not limited to, the causes of action and potential defendants listed in paragraphs 36 and 37 of the Class Action Settlement, except to the extent the holder of a Claim opts out of assigning the claims and causes of action (referred to as ‘Contributed Causes of Action’) and (iii) an amount of Cash to be determined by the Litigation Trustee in consultation with the Official Committee of Unsecured Creditors and Vida (the ‘Seed Money’).”

In addition, “On the Effective Date of the Plan, the Litigation Trustee will make an Initial Distribution to holders of Allowed General Unsecured Claims from any cash on hand in the Litigation Trust after deducting the Seed Money and, thereafter, will make subsequent distributions from cash received from liquidating the Litigation Trust Assets. Once all remaining administrative costs and expenses of the Chapter 11 Cases and the Litigation Trust have been paid or reserved for, a final distribution of all remaining cash on hand will be made to the holders of Allowed Claims. To the extent the Litigation Trust Beneficiaries have been paid their Allowed Claims in full, the residual beneficiary for any remaining cash will be the Policy Fund.”

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