Multiple parties – including Transparency Alliance, Certain IRA Investors, Advanced Life Settlement Portfolio 2011-1, Advanced Life Settlement Portfolio 2012-2, Advanced Life Settlement Portfolio 2013-3, Arbitration Objectors, Black Diamond Lifeplan Fund, Evergreen II Lifeplan Fund, Evergreen III Lifeplan Fund, Evergreen Lifeplan Fund, Pillar 3 Life Settlement Fund, Pillar 4 Life Settlement Fund, Pillar 5 Life Settlement Fund, Pillar II Life Settlement Fund, Pillar Life Settlement Fund I – filed with the U.S. Bankruptcy Court separate objections to Life Partners Holdings’ Disclosure Statement for its Amended Joint Plan of Reorganization. The arbitration objectors explains, “The Arbitration Objectors object because the Disclosure Statement does not adequately disclose that, through mandatory non-opt-out class action settlements, the Arbitration Objectors and other similarly situated investors would be required to assign to a Creditors’ Trust their arbitration claims against their broker-dealers and brokers who recommended that they purchase the securities at issue offered by Life Partners, Inc. (‘Life Partners’). The Arbitration Objectors would only be able to benefit from the proceeds of their arbitration claims if they renounce their rights to receive proceeds from their Life Partners investments. Moreover, even if they did renounce their interest in their Life Partners investments, all proceeds from Life Partners’ investors’ litigation against third parties would be thrown into one pot. The Arbitration Objectors and the other investors who have chosen to participate in the Creditors’ Trust would only receive their pro rata share of the total pot. A linchpin of the Reorganization Plan is the mandatory non-opt-out class action settlement. The Disclosure Statement does not disclose that the mandatory non-opt-out class action settlement cannot be approved under controlling law. The Reorganization Plan also incorrectly assumes that this Court rather than a district judge would approve the settlement and can approve the release of the Arbitration Objectors’ claims against their broker-dealers and brokers….If and when the district judge determines that mandatory non-opt-out class action settlements cannot be approved in this matter, then the parties are back to square one. Meanwhile, although the insurance policies underlying the Life Partners investments will continue to mature, the proceeds from these policies will continue to remain in limbo in this Court and not be distributed to elderly investors, who need these funds immediately and who might pass away while they are waiting for these funds. The Disclosure Statement does not disclose the substantial risk that, after substantial delay and after the expenditure of substantial costs to contact 22,000 investors to obtain approval of the Reorganization Plan, the Plan ultimately cannot be approved, and the parties must start over to seek to resolve this matter.” read more about bankruptcies in the insurance industry.
About Brandy Chetsas
Brandy L. Chetsas is editor in chief at Bankrupt Company News. She joined New Generation Research, Inc. in 1998. As Director of Strategic Content, she leverages 20+ years of communications and project management experience for the distressed investing sector--with particular expertise on corporate restructurings via Chapter 11. Brandy began her career writing for a law enforcement-related publication and teaching English courses at numerous colleges in the U.S. and abroad.