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 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.
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 email@example.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.
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
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.