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Life Partners Holdings Objections Filed

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The U.S. Trustee assigned to the Life Partners Holdings case and the official committee of unsecured creditors filed with the U.S. Bankruptcy Court separate objections to the Disclosure Statement for the Second Amended Chapter 11 Plan proposed by Vida Capital for Life Partners Holdings.

The Trustee asserts, “The Vida Plan, however, is facially unconfirmable because it lacks any mechanism to resolve the Ownership Issue in a manner that will bind investors who claim an ownership interest in the policies. And while Vida in its Disclosure Statement claims that the Ownership Issue ‘shall be deemed resolved pursuant to the terms of the Class Action Settlement,’ the Vida Plan, in fact, does not incorporate the Class Action Settlement in toto but unilaterally seeks to modify that settlement in several material respects.”

The objection continues, “This is the antithesis of a real settlement–Vida’s version is no settlement at all because it has not been agreed to by anyone. Thus, in the absence of an enforceable resolution of the Ownership Issue, the Vida Plan cannot be confirmed. The Vida Plan also contains a variety of other provisions that make it facially unconfirmable, including provisions that (1) permit investors who hold positions through IRA accounts to choose an investment that is forbidden by the Internal Revenue Code, (2) provide for disparate treatment of claims within a single class, (3) improperly classify claims, and (4) provide for the exculpation of Vida and anyone remotely related to it in violation of the Bankruptcy Code. The adequacy of the disclosure contained within the Vida Disclosure Statement also fails to satisfy the requirements of the Bankruptcy Code….The Vida Disclosure Statement also contains a number of material omissions and misleading–in some cases false–statements regarding, among other things, the anticipated distributions under the Vida Plan and the Second Amended Joint Plan of Reorganization of Life Partners Holdings [Dkt. No. 1688] (the ‘Joint Plan’).”

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