Life Partners Holdings Provides Update on Bankruptcy Proceedings; Outlines Certain Risks to Shareholders & Purchasers of Life...
February 23 2015 - 9:30AM
Business Wire
Life Partners Holdings Inc. (NASDAQ GS: LPHI), or the “Company,”
announced today that on February 12, 2015, the Official Committee
of Unsecured Creditors in the Company’s bankruptcy case called a
witness who has served as a receiver in several cases for the
Securities and Exchange Commission (the “Commission”), including
for companies involved in the life settlement business. As a result
of his testimony, the Company determined that it was appropriate to
communicate to its shareholders and the purchasers of life
settlements of certain risks they face in the event of the
appointment of a trustee and the potential liquidation of the
Company, including but not limited to the risks that:
- the trustee may assert the Company’s
ownership over the life settlements purchased on behalf of third
party purchasers;
- the trustee may request that the
bankruptcy court pool the life settlements and strip all beneficial
interests of the purchasers from any singular policy in which they
intended to invest;
- if pooled, those interests would be
treated as assets of the Company and the expenses of maintaining
those policies could become the responsibility of the Company or
the interests could lapse;
- the purchasers who intended to buy
interests in selected policies would be pooled together with all of
the other purchasers and only be entitled to their respective pro
rata share of the ultimate recovered funds from all of the
policies, based on the amount invested by each purchaser as
approved by the trustee;
- the pooling of the interests in the
life insurance policies may be done for the purpose, among other
things, of obtaining debt financing secured by those
interests;
- the trustee may conduct a bulk sale of
the interests, which would likely be sold at a substantial
discount; and
- the trustee may liquidate the
Company.
As a result, the purchasers of life settlements may see their
investments significantly diminished, and holders of the Company’s
common stock may see the value of their shares of the Company’s
common stock significantly diminished or even completely lost.
The Company filed a Current Report on Form 8-K with the
Securities and Exchange Commission describing these risks in more
detail on February 23, 2015.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: This news release contains forward-looking
statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include statements that relate to the intent, beliefs, plans or
expectations of the Company or its management, as well as any
estimates or projections for the outcome of events that have not
yet occurred at the time of this news release. All statements other
than statements of historical fact are forward-looking statements.
All forward-looking statements made by the Company are predictions
and not guarantees of future performance, involve material risks
and uncertainties and are subject to change based on factors that
are difficult to predict and that may be beyond the Company’s
control. Such factors include, but are not limited to: those
described under the “Risk Factors” section and elsewhere in the
Company’s Current Report on Form 8-K filed on February 23, 2015 and
its most recent Quarterly Report on Form 10-Q filed with the
Securities Exchange Commission on January 14, 2015, as well as in
other past filings with the Securities and Exchange Commission; the
risk that the Company may not be able to successfully comply with
the minimum bid requirement within the 180 day compliance period,
including for reasons outside of the Company’s control; risks and
uncertainties relating to the bankruptcy filing by the Company,
including but not limited to, (i) the Company’s ability to obtain
Bankruptcy Court approval with respect to motions in the Chapter 11
cases including maintaining strategic control as
debtor-in-possession, (ii) the ability of the Company and its
subsidiaries to prosecute, develop and consummate a plan of
reorganization, (iii) the effects of the Company’s bankruptcy
filing on the Company and on the interests of various constituents,
(iv) Bankruptcy Court rulings in the Chapter 11 cases as well the
outcome of all other pending litigation and the outcome of the
Bankruptcy case in general, (v) the length of time the Company will
operate under the Chapter 11 protection, (vi) risks associated with
third party motions in the Chapter 11 cases, which may interfere
with the Company’s ability to develop and consummate a plan of
reorganization, (vii) the potential adverse effects of the Chapter
11 proceedings on the Company’s liquidity or results of operations,
(viii) the potential adverse effects of the Chapter 11 proceedings
on regulatory and licensing agencies of our primary operating
subsidiary, Life Partners, Inc., and (ix) increased legal costs to
execute the Company’s reorganization, and other risks and
uncertainties. The Company cautions that the trading in the
Company’s securities during the pendency of the Chapter 11 case is
highly speculative and poses substantial risks. A plan of
reorganization could result in the Company’s outstanding common
stock to be diluted or extinguished and the holders of the
Company’s common stock may not receive any consideration.
Accordingly, the Company’s future performance and financial results
may differ materially and/or adversely from those expressed or
implied in any such forward-looking statements. You should not
place undue reliance on forward-looking statements. The Company
will not undertake to publicly update or revise its forward-looking
statements even if experience or future changes make it clear that
any projected results expressed or implied therein will not be
realized.
Life Partners Holdings, Inc. is the parent company of the
world’s oldest company engaged in the secondary market for life
insurance, commonly called “life settlements.” Since its
incorporation in 1991, Life Partners, Inc. has completed over
162,000 transactions for its worldwide client base of over 30,000
high net worth individuals and institutions in connection with the
purchase of over 6,500 policies totaling over $3.2 billion in face
value.
LPHI-G
Life Partners Holdings Inc.Andrea Atwell,
254-751-7797Shareholder Relationsinfo@LPHI.comwww.lphi.com