Life Partners customers who invested in roughly 3,400 life-insurance policies must decide by today between two competing plans from life-settlement firms Vida Capital Inc. and BroadRiver Asset Management, which are fighting to manage the lucrative Life Partners $2.3 billion portfolio, the Wall Street Journal reported today. The plans offer an array of payout scenarios and fees explained in more than a thousand pages of dense legal language. A bankruptcy judge approved the wording earlier this year. Federal bankruptcy rules require that plans sent to creditors be written in simple language. But a Wall Street trader who specializes in distressed trading said he can’t tell what recovery rates would be under the different scenarios. Through Life Partners, a life-insurance policyholder sold his or her policy at a discount to an investor for immediate cash. Life Partners brokered the transactions for a fee. Buyers of the policies continued paying the premiums hoping to get a profit when the insured person dies and the policy pays out. Many Life Partners customers said in interviews that lacking clarity before Monday’s voting deadline, they don’t know whom to trust. In written statements and at meetings each group held in Florida, California and other states, Vida Capital and BroadRiver accused each other of trying to disguise unreasonable customer fees. The firms jointly published a 30-page comparison chart in which each presented cost data using metrics that were different from the other’s.
