Life Partners Plans to Discuss Spinning off More Than $100M in Assets
Posted July 29, 2010 2:59PM PST

Life Partners, a Waco, Texas-based provider, said it plans to discuss spinning off more than $100 million in net assets into a separate vehicle to be owned by its shareholders following its annual shareholder meeting next Thursday.

The provider's board will look at the firm's investment in an unaffiliated life settlement trust, which was valued at almost $6.4 million in May, according to a Securities and Exchange Commission filing issued today. The trust held life settlements with a face value of $696 million at that time, the filing said.

The company says the shareholders will receive $100 million in pre-tax settlement assets worth about $6.71 per share, which are held on the company's books at $1.59 per share.

"The policies after all costs and interest are worth about $100 million or $6.71 per share," said Brian Pardo, chief executive of Life Partners, in an email to The Life Settlements Wire. "We carry them at cost on our books which is the $1.59 per share. The market is not giving our stock credit for the true value of these assets, $100 million pre-tax. So, we decided just to spin them out to our shareholders and let them each collect their portion of the $100 million in cash."

He said the shareholders would have to pay taxes on the payout.

"In this way, instead of keeping the money and not getting recognized for it in our share price we are just letting our shareholders take the cash as a dividend. Our Board will have to decide which is the most efficient way to do this," Pardo added.

Source: Press Release


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