Life Partners' Creditors' Trust

Welcome to the Official website for the Life Partners' Creditors' Trust ("Creditors' Trust") established under the Chapter 11 bankruptcy Plan confirmed by the United States Bankruptcy Court for the Northern District of Texas in the bankruptcy cases of Life Partners, Inc., Life Partners Holdings, Inc., and LPI Financial Services, Inc. (collectively, the "Debtors" or "Life Partners"). Alan M. Jacobs acts as the Creditors' Trustee.

This website provides information for persons who may have received a distribution payment from the Creditors Trust, or for those who did not receive a payment that was expected in respect to a beneficial interest held in the Trust. Please review this website before attempting to contact the Creditors Trust.

The Plan established two Successor Trusts, specifically the Creditors' Trust and the Life Partners’ Position Holder Trust (the "Position Holder Trust").

The Position Holder Trust was created to service the life settlements and viaticals for the benefit of investors who filed claims and continued to pay premiums and the catch-up amounts set by the bankruptcy plan.

The Creditors' Trust was established generally for the purposes of, inter alia:

  1. Asserting, prosecuting and attempting to collect upon litigation claims held by the Debtors' bankruptcy estates against various defendants; and

  2. Objecting to, resolving and administering general unsecured claims, including but not limited to the claims of investors relating to their "former investments". These are investments that did not mature but were no longer held by investors at the time that the confirmed bankruptcy Plan became effective, whether such claims arose because the underlying investments were lapsed, abandoned, defaulted, sold for a loss, or experienced some other disposition that resulted in loss.

The Creditors Trust was primarily established for investors who held or chose to be treated as holding claims relating to one or more such “former investments”, which the bankruptcy plan labeled “former investors”. The Creditors Trust was also established for general unsecured creditors. To qualify for a beneficial interest in the Creditors Trust, a person had to file a claim in the Life Partners bankruptcy or be a class member in certain class action litigations settled under the Plan. To qualify for a distribution, a person had to hold a valid claim, provide a tax certificate, hold a claim in excess of the de minimis threshold, and otherwise meet the requirements specified by the bankruptcy Plan. Additional information regarding the structure of the Plan as it relates to the Creditors’ Trust, regarding beneficial interests in the Creditors’ Trust, and the administration of the Creditors’ Trust, is contained in the section of this website providing Responses to Frequently Asked Questions, which can be accessed here.

As of June 30, 2021, the Creditors Trust has now completed its two primary functions of (a) resolving the causes of action held by Life Partners and the Creditors’ Trust against insiders and third parties (which primarily consisted of suits filed by the Chapter 11 Trustee during the bankruptcy) and (b) completing the claims objection and administration process to the extent it was not completed during the Life Partners bankruptcy.

Approximately 5,000 claims are held by former investors who filed or held claims in the bankruptcy case and did not receive or share in a portion of any maturity proceeds on account of their investments, or lost money on an investment that was liquidated prior to the bankruptcy case (in other words, “former investors” under the bankruptcy Plan). Some of those claims were not eligible for distribution under the Plan because they fell below the threshold for de minimis distributions or failed to meet the requirements for same under the Plan. The total former investor claims eligible to receive a distribution was approximately 4,600 former investors. The claims process also determined Life Partners left unpaid approximately $5 million in additional general unsecured creditors. Some of these claims were not eligible for distribution because they also fell below the threshold for de minimis distributions or because some general unsecured creditors failed to meet the requirements for same under the Plan.

The litigation produced approximately $4.5 million in net distributable cash. The litigation consisted of more than 20 separate cases ranging from those against single defendants, those against a small group of defendants, including one set of cases involving nearly 800 licensee defendants. The Creditors Trust determined to make a first and final distribution on June 30, 2021. Checks are being sent as of that date. Pursuant to the bankruptcy Plan, these checks will be valid for 60 days, following which any unclaimed funds will be transferred to the Position Holder Trust. When the Creditors Trust was established, it was not known how many claims would be presented, what was the extent of investor net cash losses, and whether the defendants in pending litigation had the ability to pay back the funds that applicable law required them to return. As detailed above, it is now known that the investor losses incurred by those who were unable to continue pay premiums exceeded $340 million, that the eligible former investor claimants stand at approximately 4,600 in number and $170 million in amount, and that the capacity of the defendants who received more than $200 million to respond to a judgment was only approximately 2% of that amount due to, among other matters, legal defenses to such claims or the inability to pay.The distribution is therefore approximately 2.5% of the approved claim amounts. This distribution includes the disbursement of all remaining net cash held by the Creditors’ Trust and the Creditors’ Trust is now in the process of winding down its affairs and dissolving.

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As set forth above, the Creditors' Trust is separately administered from the Position Holder Trust, and the Creditors' Trust does not deal at all with the administration of current and continuing investments of life or viatical policy settlements or the administration of premiums or death benefits. All of those functions are handled by the Trustee of the Position Holder Trust.

For a more detailed explanation of the two Successor Trusts, please click here.

On March 29, 2021, the United States Bankruptcy Court for the Northern District of Texas presiding over the Life Partners’ bankruptcy cases entered its Order closing the bankruptcy cases. For a copy of the Bankruptcy Court’s Order, please click here.

On this website, you will find access to certain major Plan documents and additional links to helpful information.