Can someone shed light on how what is happening to LPHI affects us fractional policy holders who bought various parts of policies from LPI? I am confused as to how it effects me and what I need to do. The agent who sold them to me keeps saying its just fine. Thanks
Falsie, there is no relationship between what LPI shows the investor and what the underlying premiums from the Insurer actually is.
LPI pumped that number hard, and I can't tell if it is all Carr's doing or Embry's spreadsheet. By the way, 2 more names that need to be added to the defendant list for sure.....hmmm Scienter, that could apply to Pam too.
I love the half truth aspect....who said it was a 90 yr old company? Pamabama Mike.
D&D performed escrow but was not a real "escrow company" and has some serious conflict of interest IMHO to this day due to client attorney privilege. The investors were disclosed this in their escrow documents, but I doubt they all grasped the importance of the information.
Pam, when the premium calls aren't paid by even a small fraction of the investors and LPI/LPHI have no cash, and the resale market is shut down or has no capital, what happens?
I'm all ears.
What about the policies that matured but Life Partners did not receive the death benefit on? Did those investors lose money?
What about the investors who had to sell off some of their investments at a discount because they could not afford the premium calls? Were they put in a position to sell because a licensee like yourself put too much of their net worth into this single investment? Did they lose money?
"No investor losers principle for 12-15 years out even when a premium call is due."
Is this based on your own analysis or what LPI feeds you? Have you looked at any actual policy ever? Have you looked at the premiums that are required? Have you held the illustration in your own hands? How can you see the future? What if the insurance company contests the policy?
What Pamela (Mike Tolleson) doesn't understand is that he is lying. He heard it from someone else, probably, and assumes it is true, but he does not know how to conduct true analysis of this investment. He probably really believes it is the truth, but is ignorant to the intricacies of this investment, and as a result, cannot or will not ever understand the truth. He does not understand the risk and is the type of salesperson that gives this investment a bad name.
First of all, the "agent" who sold you the investment is the last person you should trust for legal advise. Hire a lawyer, pay him/her a few bucks and determine what your options are. "Pam" obviously works for the distributor and/or is a licensee with an agenda. A lawyer should have no agenda in determining who owns the policy and what your options are if Pardo/Peden/Martin/LPHI are guilty of fraud, or if the company eventually goes belly-up. As noted before, the SEC does not want Pardo or Peden working for a public company agian. Thems fightin words.
The SEC complaint is serious stuff. As an investor you and your lawyer should read it and determine if the most important regulatory body in the securities industry is correct in assuming the returns investors are likely to get are closer to 0.04%. If you are asking your question to this forum, my quess is that you are not a lucky investor who received early maturities.
Anti...There are dozens and dozens, perhaps hundreds of attornies out of the 28,000 investors who are in this asset class with LPI.
1. They understand the transaction and are happy with their investment.
2. They don't understand the investment. If hundreds of attornies don't understand it what makes you think one more lawyer is going to understand it.
Yep...the SEC. Very competent group. Most important regulatory body. Can you say Merdoff? How often was SEC warned about this ponzi? How bout Bernie Ebbers/World Com? I could go on and on. SEC...very competent group. I have complete trust in them!? SEC sued LPHI a few years back...the lost that suit. That's not to say they will lose this one but it's prima facia evidence...actually all the above is...that they don't always get it right. Anti sounds like OWS crowd. Punish business at all costs. Believe the Fed govt is all knowing watchman of the country.
A good question and deserves a clear cut answer. Your "agent" is right...there is nothing to worry about.
As it was explained to me the LPI arrangement between the seller and fractional buyer is similar to that of a real estate broker. If one buys a home from a seller thru a broker and the broker later goes belly-up, who cares. You have the house, paying a mortgage and the brokers financial status has nothing to do with your purchase.
Even if one is waiting to close on a home (life settlement policy)and the broker goes out of business, so what? The broker never got your money...other than earnest money which is more than LPI gets from the buyer. All the buyer's money goes direct to a 90 year old escrow law firm, now Advance Trust. LPI receives none of your money. Neither did your agent.
This very simple, transparent transaction is not understood by the posters on this board. They haven't a clue as to how the tranaction is made. So long as one doesn't own any stock in LPHI, he has no concern about losing money due to LPHI's financial strength. Again, very simple concept.
1) Who owns the policy, Advance Trust or LPI?
2) Both LPI and LPHI are being sued and should the plaintiffs prevail both entities could be bankrupt. Can a receiver forward premiums if there is no money to do so? Will a receiver request that ASR transact resales to get unhappy people out of their fractional interests?
3) Why are you not suggesting the original poster contact a lawyer about what is obviously legal issues? Are you in the business of giving legal advice?
Unfortunately, the problem with Pamela's explanation is that it omits some material facts. Life Partners, Inc. becomes the owner of every single policy that is transacted, not Advanced Trust. Advance Trust became an escrow company in December of 2010, not 90 years ago; that is a plain lie. You can see the press release from LPHI here (http://ir.lphi.com/releasedetail.cfm?ReleaseID=543749 ) Advanced trust only becomes the beneficiary on the policy (this is all in your LPI paperwork). LPI of course is a wholly-owned subsidiary of Life Partners Holdings, Inc., and is, in fact, the only operating entity of Life Partners Holdings, Inc. This could have dire effects if LPHI was to end up in a receivership or bankruptcy. In those situations, the person who would take over the company would be charged with the responsibility of returning as much money to the creditors of LPHI as possible. You and the other fractional investors would be forced to fight in court to establish that your claims (i.e. your investment) should come before the shareholders of LPHI. Additionally, the SEC currently “seeks an order barring the individual Defendants [Brian Pardo, Scott Peden, and David Martin] from serving as officers or directors of a public Company.” If the court grants the SEC such an order, then these men will no longer control the operations of LPHI. This will presumably result in them also being removed from their positions in LPI. As a result, you do not know who will be running the company that owns the policy you have invested in.
The idea that your investment is fine if LPHI were to ‘go under’ is a complete and utter lie. For a salesperson to tell you that when offering you an investment is tantamount to fraud. It is always worth seeking legal counsel when the stakes are this high. There is already a class action lawsuit in federal court that you will most likely become a part of unless you decide to opt-out and pursue a claim against Life Partners on your own. Call an attorney. Worst case scenario is that you spend a couple hundred bucks for some peace of mind. Best case scenario is that you are somehow able to recover your investment before it is lost.
Your fractional interest is held in trust (Advance Trust), so in theory you are safe. The banter going around this board pertains to what ifs. For example, what if a policy is on premium call and the fractional holder refuses to pay? Right now there is premium forwarding and resales going on, but what if those things stopped because LPI someday runs out of money to cover the premiums? Could a policy lapse if one or several fractional holders stopped paying?
Another issue bantered about on this board has to do with how separate the two Life Partners entities really are, but that has more to do with some of the legal arguments and certainly not who holds custody of the fractional interest in your policy.
You are hoping that the policy holder is not lucky and dies quickly, while the wealthy policyholder intends to use his resources to live much longer than the mortality table used by Dr. Cassidy. Some people and the SEC believe the Cassidy LE is way offf.
As always, legal questions you have should be answered by lawyers with relevant expertise.
By the way, we're you shown a LPHI prospectus when you purchased your fractional investment?