November 3, 2007
STATUS OF
Pursuant to the Courts September 14, 2005 Disposition Order, “Order
on Disposition of Policies and Proceeds”,, and following the Investor voting process, there were approximately
3700 policies with an aggregate face amount of approximately $430 million that
were designated to be sold. The Receiver
determined that the best method to sell these policies was to divide them into
portfolios, which would be subject to a competitive bidding process. Policies designated for sale have thus far been
categorized as Bid 1, Bid 2, which consisted of Portfolios 1, 2, 3 and 4, and
Bid 3. Any remaining policies not
included in the aforementioned categories will ultimately be sold in a similar
manner until all policies designated for sale have been liquidated. The current status of the policies that have
been categorized for sale is as follows:
Bid 1 –
This is the initial portfolio selected for sale and consists of policies with a
cash value of at least 5% or greater of the policy’s face amount. The Court approved the sale of the Bid 1
policies on April 30, 2007, “Order
Approving Sale of Policies To SPCP Group, LLC”, and the closing took place on July 6, 2007. The Bid 1 portfolio, adjusted for maturities,
consisted of 1,376 policies with an aggregate face amount of $117,762,392 and an
approximate net cash surrender value of $12.3 million. The Bid 1 portfolio was sold for $13.6
million. As of October 30, 2007, VSI has
submitted the Transfer of Ownership requests of all Bid 1 policies to the various
insurance carriers.
The Court has not yet made a determination on the
distribution of these sale proceeds to Investors.
Bid 2, Portfolio’s 1, 2, 3 and 4 - The Court
approved the sale of the Bid 2, Portfolio’s 1,2 and 4 policies on September 26,
2007, “Order
Granting Receiver’s Motion to Approve Sales of Policies (“Bid 2,” Portfolios
#1, 2 and 4)”, and the closing
is expected to take place prior to December 31, 2007. Bid 2 (Portfolio’s 1, 2
and 4) was sold to Silver Point Capital Fund, L.P. for a total purchase price of
$11 million (subject to adjustment pursuant to the terms of the purchase
agreement). Bid 2, Portfolio’s 1, 2 and
4 consisted of the following:
Portfolio 1 – Comprised 538 policies with an aggregate face amount
of approximately $55,785,472 and an approximate net cash surrender value of
$560,602. The highest bid for Portfolio
1 was $3,750,000.
Portfolio 2 – Comprised 660 policies with an aggregate face amount
of approximately $57,187,090 and an approximate net cash surrender value of
$3,010,226. The highest bid for
Portfolio 2 was $5,750,000.
Portfolio 4 – Comprised 749 policies with an aggregate face
amount of approximately $63,698,123 and no cash surrender value. The highest bid for Portfolio 4 was
$1,500,000.
Portfolio 3
comprised of 6 policies with aggregate face amount of approximately $64,547,500
and an approximate net cash surrender value of $577,481 was determined by the
Receiver not to be sold as part of
the Bid 2 offering. The highest
offer for Portfolio 3 was $4.6 million, and the Receiver determined the offer
did not represent sufficient value.
Accordingly, the Receiver has elected, in his business judgment, to
evaluate alternatives for the sale of Portfolio 3 to generate higher
value.
The Court has not yet made a determination on the
distribution of these sale proceeds to Investors.
Bid 3 – The
Receiver’s professionals are currently preparing Bid 3 to be offered for sale very
shortly. The BID 3 portfolio is
comprised of 103 policies with an approximate aggregate face amount of
$19,616,523.00 and an approximate net cash surrender value of $ 7,792.83. The results of this sale will be posted on
this webpage when known.