Mary is 100% correct, but the reason is not understood by some posting here. If the fractionals win ownership--and they do not have ownership now for the same reasoning--a policy can and will lapse if some of the fractionals don't pay or cannot pay (ERISA law is complicated, people forget, heirs forget, etc.) their premiums. Do you want your investment to depend upon hundreds of people you do not know paying their premiums? I didn't think so.
If this law firm can actually get clients and is actually successful in a lawsuit, how do they expect to collect for their clients? Life Partners is bankrupt. Most of the licensees don't have a pot to #$%$ into. Only Pardo and the master licensees have money, and I believe there are other suits against them. I am not saying do respond to the letter (I am not an attorney and won't give legal advice), but to ask questions if you do.
What about the fractional investors who were fraudulently sold policies and were fraudulently convinced to sell them back through licensees, with the policies eventually ending up into a "fund" (now likely considered a security) controlled by a master licensee? What about people who refused to pay the outrageous servicing fees claiming suck fees are illegal, and subsequently lost their policies? Is it possible they can get their policies back? This could get very complicated unless the trustee gets what he wants.
suva.crew: Didn't the financials state, Q after Q, that LPI only bought policies from a small number of brokers (e.g., 2 or 3)? If so, it can't be difficult to trace the deals and see if there was a pattern of illegal actions on the part of the broker (I am not sure there is).
I called them once with a corporate owned $10mm convertible policy on an exec. booted from the company he started. Sweet deal due to his declining health, but LPI didn't want anything other than from their then-current suppliers of policies. I think I spoke with "He Who Plays with Trains," An arrogant SOB. Never called them again.
I agree. The two (I think it was only two) brokers that sold the preponderance of policies could have been part of the scam, but how would you prove it? If they had other customers and got them the best deal, it will be hard to prove they did anything wrong. If LPI paid up for the policies...well, that isn't the brokers' fault.
You choose several and average. The trustee has to avoid the appearance of subjecting the fractionals to another Cassiday LE.
The brokers represented the seller. Even if Pardo/LPI was the buyer of last resort, the brokers did what they were paid to do. The sellers (policy owners) are not complaining, since they got paid. The buyer (Pardo/LPI) is not complaining, since they made their money. The fractionals are complaining since they aren't getting their return after Pardo/LPI but the Cassidy LE on each policy.
This is what I don't get: How did Tad and the other clowns on the BOD benefit by approving all those dividend payments that gave the Pardo Family Trust tens of millions of dollars? Yeah, the company was stripped of cash so there is nothing left for the plaintiffs. But how did Tad and the board benefit? We know they cared nothing about the stockholders except Pardo by approving all those dividends. Why did they do this unless they also benefitted somehow? Also, why was the Pasadena Pumper necessary for pumping up the stock price in this scheme? It seems there was something else going on, perhaps offshore, that has not yet been disclosed. Hopefully, the trustee finds it.
The fraud seemed to be designed to double (at least) an accurate LE using Dr. Cassidy and having the suckers (fractional investors) break-even or perhaps make a small profit on average. This allowed LPHI to show HUGE margins and allowed Pardo to life the life of the Rich and Famous. Of course, LEs were extended by the mainstream providers in 2008 when LP was selling a ton of this stuff, yet LP didn't lengthen its LEs. So at that point Pardo ran into trouble. He knew the LEs were more that 100% off, which meant he lost his exit strategy of someday selling the company. So he went to Plan B, which was to get rid of the complaining investors by letting them sell, and earning more money through the resales. The only problem was the SEC caught onto the game so Pardo then devised Plan C, which was to deny every wrongdoing, blame everything on Big Bad Wall Street and the Boogie Man, and stretch out the lawsuits until he could deplete the corporate cash through dividends and outrageous salaries. With the cash gone, and with disgorgement always being a +&*^% to make happen, investors have to hope for maturities. suvacrew know how to value these portfolios as well as anyone in the business, but others may have a better idea about the legal fees that will ensue. The lawsuits will takes years to complete.
You are a liar, and you know it.
There was an agreement to split the interest on non-invested funds between ATLES and LPI. There was also reportedly a break-up agreement, which I imagine would come into effect if something happened to Life Partners.
Pardo and his family used all this money as personal gain via the company paying outrageous salaries, through outrageous use of company funds paying for personal benefits, and through the pilfering of the corporate cash by paying outrageous dividends at a time when the company had negative free cash flow.
You are either a lair or a fool when it comes to public audits. No audit of ATLES would cover what Pardo did, since he was the one responsible for giving the funds to ATLES to pay premiums, responsible for calculating the premiums, and responsible for the person who erroneously calculated the LEs. No audit would determine what the lawyers at ATLES knew and when they knew it. The facts are clear regarding ALTES: There was no disclosure of the material personal relationship between the Dunnam family and Brian Pardo to fractional investors, and ATLES never bothered to inform fractional investors or regulators when they became aware of serious issues regarding the fractional investments.
ATLES and its individual principals should be investigated.
Don't get me wrong, the $ was indeed given to a school bereft of funds. Unfortunately, that money came from the very fractional investors who are now wondering if they will ever see their money again. Pardo looked like a generous philanthropist using money that I believe belonged to the fractional investors. Regardless, there is no excuse for non-disclosure.
Full disclosure and transparency is important in a fiduciary relationship, since that relationship is built upon trust and fiduciaries are required to be held at a higher standard. If you GOGGLE "Vance Dunnam, Brian Pardo, Rapoport, Grant Hall" (or even some of it) you will find a curious friendship between Pardo and the Dunnam family. Dunnam & Dunnam are the lawyers behind Advance Trust & Life Escrow Services. Generally, disclosure is required when people are associated with related party relationships and transactions. If not required, the relationship should still be disclosed to eliminate an appearance of impropriety. In this case, there seems to be no disclosure of the friendship and there may or may not have been an impropriety. There should be an investigation of these lawyers who should have disclosed their relationship, which includes private legal work, for Pardo.
The trustee has a fiduciary duty and, if anything, will be transparent. The question is if he sees anything wrong with the escrow companies, and if fees will be reduced by canning them and taking the servicing "in house." It seems LPI instructed the escrow companies what premiums to pay and when to pay them. Some now believe these premiums may not have been calculated prudently. We'll see what new the trustee comes up with, if anything.
Who cares about your three maturities? I am talking about thousands of maturities that, on average, were so late that the average-to-expected ratio never, ever matched what was expected. The AtoE ratio stated out badly with the viaticals, and seemingly never improved with the settlements (LPHI was not transparent by not breaking down the numbers enough).
If there is ever an investigation of ATLES, it should start with the aging patriarch of the firm who had no issue dropping bogus lawsuits on critics of the company. His son, also a lawyer at Dunnam & Dunnam and ATLES, once owned stock in LPHI (this isn't exactly being at arms length). Pardo even had a school name a wing after his friend, after Pardo donated a huge sum that came from those ill-gotten salary, bonus, dividends and rise in stock price.
Again, ATLES had to know something was wrong. They retitled the previously sold investments and had to have known about the resales, investors getting squeezed and not being able to pay premiums, the payments LPI made to keep policies afloat, etc. ATLES knew a lot,and did absolutely nothing about it except become wealthier off the fees that came from one client, whose CEO is a personal friend of the patriarch of Dunnam and Dunnam..
Worse, the lawyers running Advance Trust had to know what was going on, by the nature of their business and the fact that it has/had only one client. These lawyers should be disbarred. Every single time there was a change in fractional ownership of a policy previously sold, it was recorded by ATLES, ATLES earned substantial fees for retitling these fractional policies, and knew fractional investors were in trouble because their policies were not maturing. As attorneys, they knew about the fraud allegations and saw firsthand proof that something was amiss. These attorneys, who have a duty to the fractional investor, never did anything to protect them. They had no problem collecting their fees.
That is BS on the part of the licensees. Yes, at first that was the party line given by Pardo publicly in the Bloomberg Pimm Fox interviews and in the NASDAQ Opening Bell speech (found today on the LPHI website). Regardless, Pardo would fly around the country giving meeting reassuring the troops everything was OK after the ______ started hitting the fan. Licensees were aware of the State of CO decision, and of the TDI views of their operation, and even disclosed some of this to the later investors. The licensees knew they were selling investments, and they knew they were not investment experts (some were hair cutters, plumbers, etc.). The Master Licensees knew what was going on, since they were privy to the payouts and could get the actual-to-expected stats from Pardo. The payout never, ever matched what was expected, and they all chose to ignore that.
The cash disappeared with the insane dividends, with half going into the offshore Pardo Family Trust. The BOD approved every single dividend. It will be a mess getting it back. Regarding the licensees, I imagine most don't have a pot to #$%$ in. The master licensees became rich off this scheme, and bought planes and boats with their commissions. It will be interesting to see if any of that ever comes back.
Yeah, but compared to the HHS? This is what I was getting at. There are old people in the burial grounds of Florida going on a cruise 4x per year, ballroom dancing and doing the StairMaster every day. They are never going to die.
Life Partners has been losing money for some time. Instead of saving for a rainy day, the BOD allowed for the payment of dividends, with half going into the Pardo Family Trust in Gibraltar. The rape of the company's cash through the payment of dividends is why the trustee is bereft of funds to run the company. Pardo took out tens of millions in dividends. This pig is now in liquidation mode. Oink, oink. No one has gone after the BOD...yet. Oink, oink.