​​​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.  

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.

ORDER GRANTING REQUEST TO MODIFY THIRD AMENDED PLAN

On April 6, 2017, the Court heard the joint motion of the PHT Trustee and the Creditors’ Trustee to modify the Third Amended Plan of Reorganization. After the motion was filed, some investors objected to the motion and other parties express concerns regarding some of the Trustees' proposals.  After significant negotiations, the Trustees and the objecting investors reached an agreement to slightly change the proposed modifications to the Plan.  After hearing evidence regarding the modified proposals and considering the statements of the investors and parties attending the hearing, the Court granted the Trustees' motion.  A copy of the entered order may be accessed with this link or on the Plan Documents Page.  The Court ordered that the Plan be modified as follows:


  •  The Plan allows the Trustees to withhold cash distributions to those who have not provided properly executed IRS Forms W-9 or W-8BEN to the Trustee.  If the investor whose distribution is held does not provide appropriate tax forms within one year, then he or she will not be entitled to receive that distribution.  The Trustees are required to request tax forms from creditors from whom they have not received a W-9 or W-8BEN after November 2016.  In order to minimize the burden on the investors, the Trustees are allowed to rely on tax forms received by either Trustee.The PHT will be sending requests out in the near future.  In the meantime, we have posted copies of the W-9 and W-8BEN forms (as well as a link to the IRS's website) on the Forms page.


  • The schedule for sending premium bills is modified to eliminate the requirement that the PHT bill only in June and December.  Instead, the PHT Trustee is to bill each policy one time per year, but on a schedule that he devises.  The current plan is to divide the policies into twelve groups so that only a limited number of policies are billed in any given month.


  • The PHT Trustee is to accept as timely any payment for the December premium invoices in his possession as of the close of business April 6, 2017.


  • The Plan provides that a Continuing Fractional Holder who fails to pay a premium call is deemed to have contributed that position to the PHT at a 20% discount.  This penalty is waived for (i) payment defaults on premiums bill in December 2016 and (II) the next premium bill for each position.  The failure to pay any future premium call will result in the deemed contribution of the position at the discount.


  • ​IRA investors who chose IRA Option 4 (Conversion) must instruct their IRA custodians to distribute their position by May 5, 2017.  In order to effectuate IRA Option 4 elections, the IRA custodians must notify the PHT that the IRA has distributed the subject position to the IRA owner by May 15, 2017.  IRA investors must instruct their IRA custodians to distribute the position by May 5, 2017 and the IRA custodians are, in turn, required to honor the request (upon filing of the appropriate forms and payment of any required fees) by May 15, 2017.  If the PHT Trustee does not receive the requisite notice of distribution by May 15, 2017, the IRA Option 4 (Conversion) election shall be deemed to be void and the investor deemed to have elected IRA Option 2 (Pool), which is the default IRA election.  The PHT Trustee may only extend the May 15, 2017 notice deadline if the IRA owner instructed his or her IRA Custodian to make the requisite distribution by May 5, 2017.

The Court's order does not allow Continuing Holders, or any other investors, to change their elections.  Accordingly, the PHT Trustee cannot do anything with any of the notices provided by Continuing Holders in anticipation of the hearing.  Continuing Holders who wish to convert to the pool can now do so by failing to pay the next premium bill they receive.  If they do so, their positions will convert into pool interest, without discount or penalty.  Please note that this special 20% penalty forgiveness is applicable to the next round of invoices for each policy.  After the next round of premium calls, the penalty will apply to all subsequent premium payment defaults.

ADDRESS FOR NOTICES OF DISTRIBUTION

Pursuant to the Court's order modifying the Plan, IRA custodians must send notices of distribution to the PHT Trustee at "such . . . address as the Position Holder Trustee shall designate in writing and post on his website."  Order at ¶ 6(b).  The PHT Trustee hereby designates the following as the address to which notices of distribution are to be sent:

Magna Servicing, LLC
P.O. Box 23226
Waco, TX  76702

ADDRESS FOR FORMS W-9 AND W-8BEN

The PHT Trustee is requesting that all investors send IRS Form W-9 or IRS Form W-8BEN to the PHT at the following address:

Magna Servicing, LLC
P.O. Box 23226
Waco, TX  76702

Please do not send these forms to the PHT Trustee's counsel (Michael Napoli and/or Aaron Kaufman) or the Creditors' Trust Trustee's counsel (Jay Ong).

If you sent a Form W-9 or W-8BEN to the PHT after November 1, 2016, you do not need to send another form.

​​DISTRIBUTIONS

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:


  • You sold a claim during the course of the bankruptcy:  We are in the process of reconciling old account information and entering new account information;
  • You requested an account change:  Due to the bankruptcy process Life Partners had to stop performing account changes, so we are in the process of reconciling old account information and entering new account information. In some cases, we are waiting for probate orders or divorce decrees to finalize account changes; and
  • You are involved in litigation with the Creditors Trust:  Under the Plan, the PHT is required to hold any distribution payable on claims held by persons subject to suit. To discuss this issue, please contact Dennis Roossien, the lawyer for the Creditors Trust.  He may be reached at 214-855-7500.

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 custsrv@magnaservicing.com 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.

INVOICES

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.


  • Invoices for annual premiums for policies with an annual premium due date between May and October 2017
  • Invoices for annual premiums for policies with an annual premium due date between January and April 2017.  This is a one-time invoice for the period between the end of the bankruptcy and the first billing cycle under the Plan.

Payments for both invoices are due in sixty days.  Investors who do not pay the invoice within thirty days will receive a reminder​.

CONTACT INFORMATION

 Magna Servicing
                     Address:  204 Woodhew Dr.
        Waco, Texas  76712 
          Phone: 800-368-5569

                 Customer Service Email: custsrv@magnaservicing.com
                 Premium Billing Email: premiums@magnaservicing.com
                 Policy Services Email: policyservices@magnaservicing.com

Billing under the Plan

On April 6, 2017, the Court modified the Plan of Reorganization to change the schedule for billing premium calls.  The PHT Trustee is no longer limited to billing only in June or December.  Instead, he has the flexibility to design a billing schedule that meets the needs of the PHT and the investors.  however, he still must bill each policy only once per year.

The PHT Trustee's current plan is to divide the policies into twelve roughly equal groups and to bill a different group each month.  In this manner, the premium payments required of Continuing Holders will be more evenly spread throughout the year easing the cash flow burden on the Holders and the administrative cost to the PHT.

As with the premium calls inveoiced in December, the PHT will allow Holders to use available escrow balances to pay future premiums.

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, the 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 the holder for its share of the premiums.

The PHT, on the other hand, can only bill holders for policy premiums once a year.  At that time, the PHT collects money from the holders to pay premiums for the following year.  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 limiting 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 2017, the PHT will bill annual premiums for policies with a May payment anniversary.  This bill is for premiums to be paid in May 2018, August 2018, November 2018, and January 2019.  When the PHT issues that December 2017 bill, it should have enough funds in escrow to pay the January 2018 premium bill.  All or some portion of the money in a holder's escrow account on December 2017 when the bill was sent is already spoken for and not available to pay the December 2017 bill.  The escrow balance an investor sees at any given time represents both (i) funds already assigned a purpose but not yet sent to the insurance company, and (ii) unencumbered funds that can be applied to the bill.  The timeline linked herein may be helpful.

Invoices 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.