FORT WORTH, Texas, Aug. 5, 2016 /PRNewswire/ -- Transparency Alliance LLC (http://www.transparencyalliance.net) has negotiated major victories for the benefit of investors and creditors as part of its active participation in the jointly administered Life Partners Holdings, Inc. bankruptcy cases.
Transparency's active participation and watchful eye in the cases led to the borrowing costs for the debtors' new $10 million lending facility sponsored by H. Thomas Moran II, the Chapter 11 Trustee, to be lowered from 14% to 8%, and improved in other ways as well. This new facility, an addition to the $25 million previously borrowed and largely spent, will be secured by certain assets of the bankruptcy estates in favor of the lender, Vida Capital Inc., an entity that recently abandoned its own quest to pursue a plan of reorganization so that it could attempt to purchase the servicing rights for the policy portfolio by becoming a proponent of the Trustee's plan.
The initial lending proposal proposed by Vida and the Trustee contained many unreasonable and onerous provisions and conditions, including a proposed interest rate of 14% for funds borrowed under the facility. Transparency objected to the proposal and ultimately offered its own facility, which included, among other things, a 5% interest rate on borrowed funds. Although Transparency's offer of 5% was admittedly more economical, it was rejected by the Trustee in his "business judgment."
Notwithstanding, the Transparency offer resulted in the Trustee and Vida substantially revising the terms of their original proposal to include more borrower-friendly terms, and will result in significant savings for the bankruptcy estates and their respective creditors by decreasing the interest rate on the facility by six percentage points, a reduction of more than 40%. An attorney representing investors said in court, "Transparency created a competitive process that resulted in a better deal for [the investors], and that is fabulous."
In addition, Transparency requested, and the court approved, a simple way for creditors to voice their individual preferences between the plan of reorganization offered by Transparency and the separate plan offered by the Trustee and the Official Committee of Unsecured Creditors.
Within the next few days, Transparency, the Trustee, and the Committee will mail a form to investors that will allow each investor to tell the court which of the two plans that individual investor prefers, even if the investor has previously voted to approve both plans. This form will be sent along with a new plan comparison chart, which will provide a side-by-side comparison of the significant provisions of each of the two plans.
In overcoming objections raised by both the Trustee and the Committee to this proposal, and with the support of other interested creditors, Judge Russell F. Nelms of the U.S. Bankruptcy Court for the Northern District of Texas was persuaded it was important to provide investors with the right to indicate their "preferred" plan of reorganization, which could play a significant factor in determining which of the two plans is ultimately confirmed by the court.
The court also ordered the extension of balloting and election deadlines for both the Transparency and Trustee plans to 11:59 p.m. (Pacific) on August 23, 2016, and, in a significant development, authorized the submission of creditor ballots by fax transmission. The logistical details relating to this important development, and other important background about Transparency's proposed plan, will be posted on www.transparencyalliance.net
"We are delighted to have spearheaded efforts which will benefit the Life Partners Holdings creditors and advance an agenda that is clearly in their best interest," said Philip Siller, Co-CEO of Transparency Alliance.
Investor queries can be directed to Transparency Alliance, an affiliate of BroadRiver Asset Management, L.P., at (888) 365-3611 or (330) 333-7266.
Transparency Alliance has organized a road show to give creditors the opportunity to learn more about the Transparency Plan and ask any questions they may have. The schedule of events includes live webinars as well as in-person meetings held in various cities. Investors can register for the webinars and meetings at: http://www.transparencyalliance.net/roadshow. An on-demand webinar has also been created to provide educational guidance on both of the proposed reorganization plans for investors, and can be viewed at: http://www.transparencyalliance.net/webinar.
About Transparency Alliance LLC
Transparency Alliance, an affiliate of BroadRiver Asset Management, L.P., was formed for the purpose of offering a safer, more cost-effective reorganization plan for the bankruptcy of the former Life Partners Holdings, Inc. (LPI). The team at Transparency Alliance has managed life insurance settlement investments for some of the world's largest institutional investors since 2002. We are successful because we are meticulous in our analysis and we understand the complexities of these assets. We also offer former LPI investors institutional-grade servicing that meets exceptionally high standards and includes a system of independent checks and balances. For more information, please visit www.transparencyalliance.net.
Investor Contact: Transparency Alliance, (888) 365-3611 or (330) 333-7266.
Media Contact: Andrew Jennings, JConnelly, (646) 922-7758 or [email protected].
SOURCE Transparency Alliance LLC