WOODBURY, New York, June 29, 2017 /PRNewswire/ --
New York-based ASM Capital announced today that the bankruptcy plan of Mosaic Management Group, Inc. is now in effect. Mosaic may now recover as much as $60 million that might otherwise not have been recovered on behalf of the creditors. Prior to its bankruptcy filing, Mosaic bought existing life insurance policies, then sold fractional interests of those policies to others.
After the Chapter 11 action was filed, the company sought to sell its assets, which were, in large part, the life insurance policies. That proposed sale process engendered a high bid of $18.5 million. However, some investors and others questioned the company's legal right to sell those policies. ASM Capital approached the Debtors with a restructuring plan to enable an exit from bankruptcy while giving investors the opportunity to either continue their holdings in fractional life insurance policies or take a one-time cash out payment.
During the case, ASM Capital provided a $5 million Debtor in Possession financing to stabilize the value of the estate. That strategy allowed the life insurance policies to be preserved and maintained during the course of the Chapter 11 through its successful conclusion. In addition to the $5 million in Debtor in Possession financing, the company's plan provided an additional $5 million in exit funding from ASM necessary to fund ongoing premium obligations and administrative expenses permitting the successful confirmation of the bankruptcy proceeding. ASM also provided an additional cash election to investors electing to cash out their investments.
Creditors from around the world were nearly unanimous in their approval of the plan, which was confirmed by the U.S. District Court, Southern District of Florida, West Palm Beach Division, on May 31, 2017.
"This plan provided a resolution to the disputes over the ownership of the life insurance policies, as well as a potential recovery to creditors well in excess of the sales process," said Jared Muroff, CFA, Director of Research for ASM Capital. "By providing capital to the debtor, we gave them the breathing room they needed to bring the bankruptcy process across the finish line with a confirmed plan of reorganization where investor creditors could continue their holdings if they so wished."
About ASM Capital
Founded in 2000, ASM Capital runs a family of investment vehicles concentrating on investing in companies undergoing the bankruptcy or restructuring process, including the purchase of unsecured claims. With nearly 50 years of combined experience, ASM Capital's investment team focuses on situations where, through its investment, it can help debtors and/or creditors successfully navigate the bankruptcy process. For information, please visit http://www.asmcapital.com or call +1-516-422-7102.
SOURCE ASM Capital