%1

A federal judge in Fort Worth, Texas, has approved a reorganization plan for Waco-based Life Partners Holdings Inc., which filed for bankruptcy protection in 2015 amid allegations that the company and founder Brian Pardo defrauded investors and put more than $1.4 billion in premiums at risk, the Waco Tribune reported today. The action means Pardo has no further involvement in the entity he created in 1991 to broker sales of life insurance policies from terminally ill patients to investors from around the world. Life Partners Holdings became a frequent target of the Securities and Exchange Commission, which most recently alleged the company purposefully underestimated the life expectancy of clients selling policies, making them more desirable to investors. The commission imposed an almost $47 million judgment. That case prompted the company’s bankruptcy filing and the involvement of trustee H. Thomas Moran II. Bankruptcy Judge Russell F. Nelms confirmed the reorganization plan on Tuesday after Moran spent months identifying 22,000 investors; holding town hall-style informational meeting in several cities, including Waco; and holding five weeks of hearings before Judge Nelms in a Fort Worth courtroom. The ruling preserves a portfolio of life insurance policies with a face value of $2.4 billion and provides a more certain future for $1.4 billion in premiums. Read more. 

Don’t miss next Tuesday’s free abiLIVE webinar “Administration of a Mega Ponzi Scheme Case: Receivership v. Bankruptcy.”

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

Delivery Agent Inc., which helps entertainment and sports operations sell products online, is seeking to pay top executives up to $3 million in bonuses during its bankruptcy proceedings, the Wall Street Journal reported on Friday. The e-commerce company outlined a plan to reward six executives, including Chief Executive Mike Fitzsimmons, with bonuses tied to the success of its pending sale, according to court papers filed on Thursday with the U.S. Bankruptcy Court in Wilmington, Del. Delivery Agent said in a court filing that the bonuses will be granted “only upon the successful closing of a sale or sales of Delivery Agent’s assets, and, therefore, are directly linked to results.” At next month’s auction, Hillair Capital Investments LP will start the bidding for Delivery Agent’s assets with its offer to forgive nearly $19 million in debt through a so-called credit bid. At a minimum, executives, such as Chief Financial Officer Jeff Hagan and President of E-Commerce Peter Lai, will be eligible for bonuses if a winning bidder pays enough to satisfy Hillair’s debts plus an extra $2 million. If winning bidders offer more than that, the bonus payments will increase, for a maximum payout of $3 million. The U.S. Bankruptcy Court in Wilmington, Del. is expected to review the bonuses at a Nov. 17 hearing. Any objection to the pay proposal plan must be filed with the court by Nov. 10.