LIFE PARTNERS POSITION HOLDER TRUST
Welcome to the Life Partners Position Holder Trust’s website. This website was established to provide Life Partners investors with information regarding the status of the PHT and their investments. If you have any difficulty viewing the entire page, please maximize your view on your computer so you can see the blue button bars at the left side of the screen. You can use these button bars to move between the pages of this website.
Please note there have been recent updates to the FAQs page. Please consult these before contacting either Magna Servicing or the Trustee as your question may be answered there.
REQUEST TO MODIFY THIRD AMENDED PLAN
Notice of Hearing on Trustee's Motion to Modify Third Amended Plan: NOTE: a hearing will be held on April 6, 2017 at
2:00 p.m. CST at the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division, 501 W. Tenth Street, Courtroom 204, Fort Worth, Texas 76102. A copy of the Notice of Hearing may be accessed here [Docket #3948]
On March 22, 2017, the PHT Trustee and the Creditors’ Trustee jointly filed a motion to modify the Third Amended Plan of Reorganization. By their motion, the Trustees have proposed several changes to the Plan designed to improve the operation of the Trusts for the benefit of the investors. The proposed changes are:
A copy of the motion and proposed order are available [Docket #3944]. In addition, the Trustees will cause the motion and notice of any hearing to be served as required by the Rules of Bankruptcy Procedure.
To date the PHT has distributed over $105 million in Maturity Funds and $23 million in Maturity Funds Loans and accrued interest. We are in the process of reconciling accounts to distribute the remaining $20 million in Maturity Funds and approximately $4 million in Maturity Funds Loans and Interest. The remaining distributions were held up due to the following:
As we complete the reconciliation process with respect to distributions we will remit checks. We anticipate that all but a small group (litigation and accounts transferring to multiple people) will be completed by February 7, 2017. If your maturity occurred on a position held in your IRA account, the check will be mailed to your custodian.
In addition, we are still collecting death benefits on life insurance policies that matured prior to the Effective Date. Those funds will be distributed as soon as reasonably practicable after receipt.
POST EFFECTIVE DATE RECONCILIATION
The Plan was effective on December 9, 2016. At that time, the PHT was formed and Vida Capital Inc. through its subsidiary, Magna Servicing LLC (“Magna”), became the Servicer. The Plan imposed a number of deadlines that Magna and the PHT had to meet before the end of 2016. As required by the Plan, the PHT distributed about $128 million in maturities and maturity loan repayments. In addition, and as also required by the Plan, we issued thousands of invoices for the premiums necessary to maintain the approximately 3,400 policies that we are holding. All of this was completed in the three weeks between the effective date, December 9, and the end of the year.
At the same time, we have been working on the post-effective reconciliation process required by the Plan as well as transferring the servicing to the new servicer and beginning the process of transferring the ownership and beneficiary status of the policies. The Plan provides for a Post-Effective Date Reconciliation process that is due to continue for 135 days until April 24, 2017. In addition to collecting and reconciling the Catch-Up and PPDA payments and completing numerous other tasks required by the Plan, the process includes sorting, organizing and reconciling a great deal of data into new systems that support the reorganized structure. We are currently on schedule to meet April 24, 2017 deadline, and ask for your support while we work through this demanding process. Thank you in advance for your patience. For your convenience, we will be posting FAQ’s as we go along. You can also contact the Customer Service Department of Magna Servicing, LLC, by phone at 1-800-368-5569 or by email at firstname.lastname@example.org if you have any questions or need further information. Should you have a specific research request, email is the preferred form of communication and will yield the quickest response.
On December 30, 2016, the PHT sent out two sets of invoices to Continuing Fractional Holders relating to policies in which they hold an interest.
Payments for both invoices are due in sixty days. Investors who do not pay the invoice within thirty days will receive a reminder.
Address: 204 Woodhew Dr.
Waco, Texas 76712
Billing under the Plan
The bankruptcy and the Plan of Reorganization changed many things about the manner in which Life Partners (and now the Position Holder Trust) conduct business. One of the more significant changes for Continuing Position Holders is billing for premium calls. The PHT will handle billing very differently than the how LPI handled billing in the past.
The Plan requires that the PHT follow very specific procedures in billing premium calls. Under the Plan, the PHT must bill holders of a policy when the total cash value and total amount on escrow for the policy are insufficient to pay premiums for the next year. The PHT can only bill a policy one time a year, at least 120 days before the premium due date and only in June or December.
In practical terms this means that the PHT will bill all policies (except those with sufficient cash value) every year on the following schedule:
December Cycle: Policies with annual premium due dates in May through October of the following year. Thus,
in December 2016, the PHT billed for these premiums due:
June Cycle: Policies with annual premium due dates in November and December of the current year and
January through April of the following year. Thus, in June 2017, the PHT will bill for the following
Please note that the PHT must send invoices to all holders in a given policy even if that holder has an sufficient amount in escrow to pay his or her share of the premium call.
Escrow Balances under the Plan
Because the Plan requires a different method of billing than LPI used previously, the PHT must handle escrow balances differently than LPI had in the past. In the past, LPI had billed for premium payments as they were made. When a payment needed to be made, LPI determined whether a position holder had sufficient money in escrow to pay its share of the payment. If so, LPI would use the escrowed money to pay the position holder’s share of the premium and reduce the escrow balance. If there was not enough money on escrow, LPI would bill for the holder for its share of the premiums.
The PHT, on the other hand, bills holders for premiums for a policy once a year in either June or December. At that time, the PHT collects money from the holders to pay premiums for the following year. Because of the billing schedule required by the Plan, the PHT is billing for premiums related to a policy renewal that may not occur for many months. For example, in December 2016, the PHT billed for annual premiums for policies with a premium renewal date in October 2017. The premiums related to those policies will be paid from October 2017 through September 2018.
Although it is required to collect premiums annually, the PHT does not pay premiums to the insurance company just once a year. For most policies, the PHT pays premiums to the insurance company every three months. This is the standard practice in the life settlement industry allowing more control over the payment of premiums and limits the loss of value that occurs when an insured dies. If an insured dies right after a premium is paid, the insurance company keeps the premium. Paying premiums quarterly reduces these losses to no more than three months’ worth of premiums.
Because the PHT is required to hold and use money paid by holders over the course of several months, not all of the money that is shown in a holder’s escrow can be used to pay future premiums. For example, in December 2016, the PHT billed for annual premiums for policies with an October anniversary. This bill is for premiums to be paid from October 2017 through September 2018. To keep the policy in force until October 2017, the PHT must pay premiums on January 2017, April 2017 and July 2017. The money in a holder’s escrow account in December 2016 when the bill was sent is needed to pay these premiums. As such the escrow balance an investor sees at any given time represents both unencumbered funds and funds already assigned a purpose but not yet sent to the insurance company. The attached timeline may be helpful.
Future invoices (beginning with the June 2017 cycle) will include an escrow reconciliation for each position. This reconciliation will identify the amount in escrow for that position in excess of the current premium needs. Because of the on-going post-effective date reconciliation process which will last until April, the PHT was unable to include that information on the current invoice.