Life Partners Holdings Inc. won’t have to entertain competing bids to reorganize its assets, which include stakes in life insurance policies with a face value of $2.4 billion, until at least next month, Bloomberg News reported on Friday. The bankrupt dealer of so-called “life settlements” can retain control of its chapter 11 case for now, Bankruptcy Judge Russell Nelms ruled on Friday. The company’s bankruptcy trustee has warned that competing bids could derail any successful reorganization. Life Partners, founded in 1991, sold stakes in life insurance policies to around 22,000 individuals. Those purchasers got a payout on their investment when the insured person died. The catch is they had to pay premiums while that person still lived: the longer they lived, the more the premiums ate into — or outmatched — potential returns. Life Partners relied on an expert to estimate life expectancies, a key factor in the price investors would pay for their stake. It filed for bankruptcy in January after a Texas jury sided with the Securities and Exchange Commission, finding the expert’s death estimates were low-balled. Unwilling to pay a $46 million judgment, the Waco, Texas-based company sought court protection.
