Official Committee of Unsecured Creditors – Life Partners Bankruptcy The following slides present the Committee's analysis of a chart that Transparency has been using. The Committee strongly urges investors to look at the Court‐approved documents, including particularly Trustee Ex. C, Trustee Ex. D, and Transparency Ex. 4. These exhibits are available at www.lifepartnerscommittee.com. So, let's start with the Transparency Chart.
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Official Committee of Unsecured Creditors – Life Partners Bankruptcy
The following slides present the Committee's analysis of a chart that Transparency has been using. The Committee strongly urges investors to look at the Court‐approved documents, including particularly Trustee Ex. C, Trustee Ex. D, and Transparency Ex. 4. These exhibits are available at www.lifepartnerscommittee.com.
So, let's start with the Transparency Chart.
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
The first question one might ask, is why put 10 year numbers in the Transparency column, and 30 year numbers in the Trustee column? Shouldn't one compare apples to apples?
If you compared 10‐year numbers to 10‐year numbers, the next slide shows what happens.
The second question one might ask, is why include Tom Moran as the Position Holder Trustee? He is not the Position Holder Trust Trustee, that is Eddy Espinosa (TR Plan) or Transparency PRT Trustees, LP (TA Plan).
So, this row is struck through on the next slide.
Use the same 10‐year comparison
Both plans have to pay Moran whatever the Court Awards
$35,548
Not PHT Trustee Not PHT Trustee
$15,628
$74.4 million $55.3 million
Committee Correction of Transparency Chart Using Figures In Approved Charts
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
Could Transparency have used 10‐year numbers? Sure, they could have used Trustee's Exhibit D. Look at the next few slides to see how they could have done that.
Ca sh Av a i l a bl e f r om P HT Ope r a t i ons 7 3 , 6 8 4 2 4 , 4 6 6 5 4 , 9 4 2 4 7 8 , 3 3 9 2 4 8 , 16 3 8 7 9 , 5 9 3
P r e - Ef f e c t i v e Da t e Adj ust me nt sBeginning Cash Adjustment 1,473 1,473 Exclude Pre-Effective Date Maturities [ 2] (74,936) - - - - (74,936)Exclude Pre-Effective Date Premiums [ 3] 25,556 - - - - 25,556 Include Other LPI Pre-Effective Date Cash Flows (6,958) - - - - (6,958)Tot a l P r e - Ef f e c t i v e Da t e Adj ust me nt s ( 5 4 , 8 6 5 ) - - - - ( 5 4 , 8 6 5 )
Reserves for PHT Operations [ 18] (18,819) 17,997 (559) (4,850) (15,488) (21,719)Distribution of Ending Cash [ 19] - - - - 21,340 21,340 Distributions to Continuing Position Holders andNew IRA Noteholders (on 5% interest) [ 20] (853) (871) (2,448) (73) (4,245)
Ca sh D i st r i but i ons t o P HT Be ne f i c i a r i e s( Ex c l udi ng Cont i nui ng P osi t i on Hol de r s) 4 1, 6 10 5 3 , 5 13 4 7 1, 0 4 0 2 5 3 , 9 4 2 820,104
Ca sh Av a i l a bl e f r om P HT Ope r a t i ons 7 3 , 6 8 4 2 4 , 4 6 6 5 4 , 9 4 2 4 7 8 , 3 3 9 2 4 8 , 16 3 8 7 9 , 5 9 3
P r e - Ef f e c t i v e Da t e Adj ust me nt sBeginning Cash Adjustment 1,473 1,473 Exclude Pre-Effective Date Maturities [ 2] (74,936) - - - - (74,936)Exclude Pre-Effective Date Premiums [ 3] 25,556 - - - - 25,556 Include Other LPI Pre-Effective Date Cash Flows (6,958) - - - - (6,958)Tot a l P r e - Ef f e c t i v e Da t e Adj ust me nt s ( 5 4 , 8 6 5 ) - - - - ( 5 4 , 8 6 5 )
Reserves for PHT Operations [ 18] (18,819) 17,997 (559) (4,850) (15,488) (21,719)Distribution of Ending Cash [ 19] - - - - 21,340 21,340 Distributions to Continuing Position Holders andNew IRA Noteholders (on 5% interest) [ 20] (853) (871) (2,448) (73) (4,245)
Ca sh D i st r i but i ons t o P HT Be ne f i c i a r i e s( Ex c l udi ng Cont i nui ng P osi t i on Hol de r s) 4 1, 6 10 5 3 , 5 13 4 7 1, 0 4 0 2 5 3 , 9 4 2 820,104
C a sh A v a i l a bl e f r om P HT Ope r a t i ons 7 3 , 6 8 4 2 4 , 4 6 6 5 4 , 9 4 2 4 7 8 , 3 3 9 $631,431 P r e - Ef f e c t i v e Da t e Adj ust me nt sBeginning Cash Adjustment 1,473 $1,473 Exclude Pre-Effective Date Maturities [ 2] (74,936) - - - ($74,936)Exclude Pre-Effective Date Premiums [ 3] 25,556 - - - $25,556 Include Other LPI Pre-Effective Date Cash Flows (6,958) - - - ($6,958)Tot a l P r e - Ef f e c t i v e Da t e A dj ust me nt s ( 5 4 , 8 6 5 ) - - - ($54,865)
Reserves for PHT Operations [ 18] (18,819) 17,997 (559) (4,850) ($6,231)Distribution of Ending Cash [ 19] - - - -Distributions to Continuing Position Holders andNew IRA Noteholders (on 5% interest) [ 20] (853) (871) (2,448) ($4,172)
C a sh D i st r i but i ons t o P HT Be ne f i c i a r i e s
( Ex c l udi ng Cont i nui ng P osi t i on Hol de r s) 4 1, 6 10 5 3 , 5 13 4 7 1, 0 4 0 $566,163
Maturities [ 2] $101,476 $115,462 $135,499 $997,244 $1,349,681 Premiums [ 3] (36,099) (49,046) (62,036) (475,649) (622,830)Ne t Ca sh Fl ow f r om P or t f ol i o 6 5 , 3 7 7 6 6 , 4 16 7 3 , 4 6 3 5 2 1, 5 9 5 7 2 6 , 8 5 1
Ca sh Av a i l a bl e f r om P HT Ope r a t i ons 7 3 , 6 8 4 2 4 , 4 6 6 5 4 , 9 4 2 4 7 8 , 3 3 9 6 3 1, 4 3 1
P r e - Ef f e c t i v e Da t e Adj ust me nt sBeginning Cash Adjustment 1,473 1,473Exclude Pre-Effective Date Maturities [ 2] (74,936) - - - (74,936)Exclude Pre-Effective Date Premiums [ 3] 25,556 - - - 25,556Include Other LPI Pre-Effective Date Cash Flows (6,958) - - - (6,958)Tot a l P r e - Ef f e c t i v e Da t e Adj ust me nt s ( 5 4 , 8 6 5 ) - - - ( 5 4 , 8 6 5 )
Reserves for PHT Operations [ 18] (18,819) 17,997 (559) (4,850) (6,231)Distribution of Ending Cash [ 19] - - - -Distributions to Continuing Position Holders andNew IRA Noteholders (on 5% interest) [ 20] (853) (871) (2,448) (4,172)
Ca sh D i st r i but i ons t o P HT Be ne f i c i a r i e s
( Ex c l udi ng Cont i nui ng P osi t i on Hol de r s) 4 1, 6 10 5 3 , 5 13 4 7 1, 0 4 0 5 6 6 , 16 3
Maturities [ 2] $101,476 $115,462 $135,499 $997,244 $1,349,681 Premiums [ 3] (36,099) (49,046) (62,036) (475,649) (622,830)Ne t Ca sh Fl ow f r om P or t f ol i o 6 5 , 3 7 7 6 6 , 4 16 7 3 , 4 6 3 5 2 1, 5 9 5 7 2 6 , 8 5 1
Ca sh Av a i l a bl e f r om P HT Ope r a t i ons 7 3 , 6 8 4 2 4 , 4 6 6 5 4 , 9 4 2 4 7 8 , 3 3 9 6 3 1, 4 3 1
P r e - Ef f e c t i v e Da t e Adj ust me nt sBeginning Cash Adjustment 1,473 1,473Exclude Pre-Effective Date Maturities [ 2] (74,936) - - - (74,936)Exclude Pre-Effective Date Premiums [ 3] 25,556 - - - 25,556Include Other LPI Pre-Effective Date Cash Flows (6,958) - - - (6,958)Tot a l P r e - Ef f e c t i v e Da t e Adj ust me nt s ( 5 4 , 8 6 5 ) - - - ( 5 4 , 8 6 5 )
Reserves for PHT Operations [ 18] (18,819) 17,997 (559) (4,850) (6,231)Distribution of Ending Cash [ 19] - - - -Distributions to Continuing Position Holders andNew IRA Noteholders (on 5% interest) [ 20] (853) (871) (2,448) (4,172)
Ca sh D i st r i but i ons t o P HT Be ne f i c i a r i e s
( Ex c l udi ng Cont i nui ng P osi t i on Hol de r s) 4 1, 6 10 5 3 , 5 13 4 7 1, 0 4 0 5 6 6 , 16 3
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
What about the Continuing Holders, what if we put in numbers instead of percentages?
Well, which do you think is larger over ten years, TA's annual servicing fees, or TR's fee at maturity?
Let's look.
Next slide shows the total servicing fees from TR's Exhibit D.
Maturities [ 2] $101,476 $115,462 $135,499 $997,244 $1,349,681 Premiums [ 3] (36,099) (49,046) (62,036) (475,649) (622,830)Ne t Ca sh Fl ow f r om P or t f ol i o 6 5 , 3 7 7 6 6 , 4 16 7 3 , 4 6 3 5 2 1, 5 9 5 7 2 6 , 8 5 1
Ca sh Av a i l a bl e f r om P HT Ope r a t i ons 7 3 , 6 8 4 2 4 , 4 6 6 5 4 , 9 4 2 4 7 8 , 3 3 9 6 3 1, 4 3 1
P r e - Ef f e c t i v e Da t e Adj ust me nt sBeginning Cash Adjustment 1,473 1,473Exclude Pre-Effective Date Maturities [ 2] (74,936) - - - (74,936)Exclude Pre-Effective Date Premiums [ 3] 25,556 - - - 25,556Include Other LPI Pre-Effective Date Cash Flows (6,958) - - - (6,958)Tot a l P r e - Ef f e c t i v e Da t e Adj ust me nt s ( 5 4 , 8 6 5 ) - - - ( 5 4 , 8 6 5 )
Reserves for PHT Operations [ 18] (18,819) 17,997 (559) (4,850) (6,231)Distribution of Ending Cash [ 19] - - - -Distributions to Continuing Position Holders andNew IRA Noteholders (on 5% interest) [ 20] (853) (871) (2,448) (4,172)
Ca sh D i st r i but i ons t o P HT Be ne f i c i a r i e s
( Ex c l udi ng Cont i nui ng P osi t i on Hol de r s) 4 1, 6 10 5 3 , 5 13 4 7 1, 0 4 0 5 6 6 , 16 3
N e w IR A N o t e & C o n t in u ing H o ld e rs 14,188 14,188 14,188 14,188I RA Not e
New IRA Noteholder Payments Received - 426 426 2,979 3,831New IRA Noteholder Distributions from PHT [20] 21 21 59 101P a y me nt s / D i st r i but i ons t o Ne w I RA 447 447 3038 3 , 9 3 2
Cont. Frac. Holder Distributions from PHT [ 20] 833 850 2389 4072Di st r i but i ons t o Cont ' g Fr a c t i ona l Hol de r s 2 6 , 8 4 9 2 8 , 2 9 2 2 5 , 0 3 1 5 9 , 9 9 8 14 0 , 17 0D i st r i but i ons t o Ne w I RA Not e & Cont i nui ng Hol de r sM a t ur i t y Esc r owDi st r i but i on of P r e - Ef f e c t i v e Da t e M a t ur i t i e s [ 2 7 ]
15 7 , 2 8 3 15 7 , 2 8 3
Tot a l Re c ov e r i e s D i st r i but e d [ 2 8 ] 867,548
PHT Servicing ‐ $35,548
CH Servicing ‐ $6,481
Total ‐ $42,029
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
So, 42 million is the Trustee figure.
Let's look at TA's Ex. 4.
Total Servicing Fee ‐ $43,736
Pool Servicing Fee ‐ $29,065
CH Servicing Fee ‐ $14,671
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
So, 42 million is the Trustee figure.
Let's look at TA's Ex. 4.
So, 43 million is the Transparency figure.
What happens if we add these numbers to the chart?
Maturities [ 2] $101,476 $115,462 $135,499 $997,244 $1,349,681 Premiums [ 3] (36,099) (49,046) (62,036) (475,649) (622,830)Ne t Ca sh Fl ow f r om P or t f ol i o 6 5 , 3 7 7 6 6 , 4 16 7 3 , 4 6 3 5 2 1, 5 9 5 7 2 6 , 8 5 1
Ca sh Av a i l a bl e f r om P HT Ope r a t i ons 7 3 , 6 8 4 2 4 , 4 6 6 5 4 , 9 4 2 4 7 8 , 3 3 9 6 3 1, 4 3 1
P r e - Ef f e c t i v e Da t e A dj ust me nt sBeginning Cash Adjustment 1,473 1,473Exclude Pre-Effective Date Maturities [ 2] (74,936) - - - (74,936)Exclude Pre-Effective Date Premiums [ 3] 25,556 - - - 25,556Include Other LPI Pre-Effective Date Cash Flows (6,958) - - - (6,958)Tot a l P r e - Ef f e c t i v e Da t e A dj ust me nt s ( 5 4 , 8 6 5 ) - - - ( 5 4 , 8 6 5 )
Reserves for PHT Operations [ 18] (18,819) 17,997 (559) (4,850) (6,231)Distribution of Ending Cash [ 19] - - - -Distributions to Continuing Position Holders andNew IRA Noteholders (on 5% interest) [ 20] (853) (871) (2,448) (4,172)
Ca sh D i st r i but i ons t o P HT Be ne f i c i a r i e s
( Ex c l udi ng Cont i nui ng P osi t i on H ol de r s) 4 1, 6 10 5 3 , 5 13 4 7 1, 0 4 0 5 6 6 , 16 3
N e w IR A N ot e & C on t inu in g H o lde rs 14,188 14,188 14,188 14,188I RA Not e
Beginning Balance 0Interest Received - 426 426 2979 3831Principal Received - - - - 0Ending Balance 14,188 14,188 14,188 14,188 14,188New IRA Noteholder Payments Received - 426 426 2,979 3,831New IRA Noteholder Distributions from PHT [20] 21 21 59 101P a y me nt s / D i st r i but i ons t o Ne w I RA Not e hol de r s 447 447 3038 3 , 9 3 2
Cont i nui ng Fr a c t i ona l I nt e r e st sMaturities [ 22] 42,515 48,832 45,868 113,945 251,160Premiums [ 23] (14,561) (19,934) (20,335) (52,978) (107,808)Escrowed Premium Credit [ 24] 30,468 - - - 30,468Exclude Pre-Effective Date Maturities [ 25] (31,242) - - - (31,242)Servicing Fees [ 26] (332) (1,439) (1,352) (3,358) (6,481)Cont. Frac. Holder Distributions from PHT [ 20] 833 850 2389 4072Di st r i but i ons t o Cont ' g Fr a c t i ona l H ol de r s 2 6 , 8 4 9 2 8 , 2 9 2 2 5 , 0 3 1 5 9 , 9 9 8 14 0 , 17 0
D i st r i but i ons t o Ne w I R A Not e & C ont i nui ng H ol de r s
Maturity Escrow
Distribution of Pre‐Effective Date Maturities [ 2 7 ] 157,283 15 7 , 2 8 3
Tot a l Re c ov e r i e s D i st r i but e d [ 2 8 ] 867,548
100% of Maturities ‐ $165,561
95% of Maturities ‐ $157,283
Pooled Maturities ‐ $8,278
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
For those of you who are still thinking that the 5% pooling takes away value, consider this: both fractional interest holders and the pool are investing in the same policies. How much different can the value of a 95% fractional interest and a 5% pooled fractional interest really be?
And does Transparency even try to answer that question? No, they just assume the 5% becomes worthless when put into the pool.
But, look at the Trustee's Ex. D. The pool pays a return. That is interest is not worthless.
Besides, Transparency is comparing the 5% pooling to their 3.1% bill.
So, let's add the numbers onto the chart that are actually cash‐out‐of‐pocket numbers on the effective date, and see which plan takes more money from continuing interest holders on the effective date.
Use the same 10‐year comparison5% is not a bill
Both plans have to pay Moran whatever the Court Awards
$6,481
$8,278
$35,548
$14,671
$25,043
Not PHT Trustee Not PHT Trustee
$15,628
$113 millionPlan $70 million
Committee Comment on Transparency Chart Using Figures In Approved Charts
$29,065
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
There is one other number that Transparency changed, for some reason they used a higher exit financing number than was in their chart. See the next slide.
Notice also that their PHT admin is for only one year? Curious.
Notice also that there is no Moran fee in the PHT. That is because he is not the PHT Trustee! In fact, the bankruptcy judge will assess his fee as part of the bankruptcy costs, and both plans have to pay the same.
PHT Legal (1 Year) ‐ $1,130 (No Moran Fee in Pool)
Exit Financing Fee (10 Years) ‐ $41,785
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
They also could have found the Trustee (Vida) exit fee on the Trustee's Exhibit D. See the next chart.
Maturities [ 2] $101,476 $115,462 $135,499 $997,244 $1,349,681 Premiums [ 3] (36,099) (49,046) (62,036) (475,649) (622,830)Ne t Ca sh Fl ow f r om P or t f ol i o 6 5 , 3 7 7 6 6 , 4 16 7 3 , 4 6 3 5 2 1, 5 9 5 7 2 6 , 8 5 1
New IRA Note Interest Payments [ 4] - (426) (426) (2,979) (3,831)New IRA Note Sinking Fund Reserves/Payments - (946) (946) (6,621) (8,513)Maturity Funds Facility Draws [ 6] 11,172 - - - 11,172Maturity Funds Facility Payments & Interest [ 7] (26,656) - - - (26,656)DIP Facility Draws[9] 5,000 5,000DIP Facility Payments and Interest[9] (5,058) (5,058)Exit Facility Draws[9] 22,901 22,901 22,901 Exit Facility Payments and Interest[9] (400) (26,576) (100) (27,076) (27,076)
Exit Facility Net: (4,175)
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
So, here's a chart that uses the numbers that we have just walked through.
You can see that it shows a very different picture of the two plans.
Use the same 10‐year comparison5% is not a bill
Both plans have to pay Moran whatever the Court Awards
$6,481
$8,278
$35,548
$14,671
$25,043
Not PHT Trustee Not PHT Trustee
$15,628
$111,664Plan $70,135
Committee Comment on Transparency Chart Using Figures In Approved Charts
$41,785 $4,175
$29,065
Official Committee of Unsecured Creditors – Life Partners Bankruptcy
BE SMART.
READ THE COURT‐APPROVED EXHIBITS. SEE FOR YOURSELF.
WE THINK YOU WILL WANT TO:
VOTE FOR THE TRUSTEE PLAN.
VOTE TO REJECT THE TRANSPARENCY PLAN.
IF YOU VOTE 'YES' FOR BOTH, EXPRESS YOUR PREFERENCE FOR THE TRUSTEE PLAN.