BroadRiver Buys Non-Cash Life Partners Assets

The Position Holders Trust

The bankruptcy court authorized the creation of the position holders trust to manage the Life Partners policy portfolio on behalf of the company’s investors.

On June 30, the trust was managing 2,435 policies, including 330 that were classified as life settlements and 2,105 classified as viaticals, or policies insuring the lives of people believed to have what were believed to be life-threatening illnesses when the policies were purchased.

The trust noted that the COVID-19 pandemic hurt its cash flow, by leading to delays in the process for filing life insurance claims and collecting death benefits.

In New York state, for example, the average time needed to get a death certificate increased to six months, from a few weeks before the pandemic hit, according to trust estimates.

The trust posts many details about its portfolio on the open web, including the date of death, check received date and benefit payment amount for 659 policy death benefit payments that it has administered between 2017 and mid-July.

On July 18, for example, it received $100,000 in benefits for a death that occurred May 21 and was discovered May 31.

It also received $150,000 for a death that occurred Oct. 9, 2021, but was not discovered until June 6, 2022.

The BroadRiver Deal

The Life Partners trust has served several classes of investors, including many who invested in Life Partners portfolios through IRAs.

The trust participants have had to pay for asset pool administration and compliance services.

Now that the trust is selling its remaining assets, it will pay cash to some trust participants and then dissolve, BroadRiver said.

Some types of portfolio investors could face problems if other parties default on paying the premiums for the policies in the Life Partners policy portfolio.

A cash pool will help compensate for premium payment defaults for six years, according to BroadRiver.

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