FAQs

Solicitation Generally

2.1 What is Chapter 11? What is a reorganization?

A reorganization under Chapter 11 allows a business to reorganize without shutting down, by providing protection from creditors and other obligations.

2.2 What is a “Plan of Reorganization”?

Generally, in chapter 11 bankruptcy cases, the Debtors or other Plan Proponents, will propose a “plan” that will classify claims against the Debtors, specify the treatment for each class of claims (including the proposed payment of claims), and describe how the debtor will carry out the terms of the proposed Plan.

2.3 What is a Disclosure Statement”?

A disclosure statement provides the background and information needed for a creditor to make an educated decision on whether to vote to accept or reject the chapter 11 plan.

2.4 What is the solicitation process?

The solicitation process allows creditors within the “voting classes” to review the proposed Plan and vote whether to accept or reject the Plan’s terms. After the voting is completed, if the Plan receives the required votes in favor of the plan, the Plan is submitted to the Bankruptcy Court for approval. Once the Bankruptcy Court approves the Plan, it becomes binding on all creditors.

If you have additional questions regarding the Chapter 11 Plans or the solicitation process, please consult with your own attorney.

Is there a forum for me to learn more about the Transparency Plan? Am I able to ask representatives of Transparency questions about the details of their plan?

Yes. To provide you with additional information about the Transparency Plan, Transparency will be conducting in-person meetings and webinars in a number of cities on a number of dates. Please check the solicitation letter that you should have already received, or you can go to www.transparencyalliance.net for the most recent schedule. Please make sure to sign if you plan on attending.

The exact locations and times of these events will be available on the Transparency Alliance website before the event. All locations, dates and times are subject to change, so please check the website before your session. Additional webinars may be scheduled and details will be available on the Transparency Alliance website.

How do I register for a webinar?

If you would like to participate either in person or by webinar, please call (888) 365-3611 or (330) 333-7266 so that we can reserve a spot for you. Registration is mandatory.

Life Partners Solicitation Process, Procedures, and Deadlines

2.5 How many Plans exist for Life Partners?

Currently there are two proposed plans of reorganization for Life Partners—one filed by the Chapter 11 Trustee and Creditors’ Committee and another, more favorable plan, filed by Transparency Alliance LLC.

The Transparency Alliance plan is formally known as the Creditors’ Third Amended Plan of Reorganization of Life Partners Holdings, Inc., et al. and informally known as the “Transparency Plan.” You can find the Transparency Plan on the Court Docket as item number 2671 filed on July 11, 2016.

2.6 Did solicitation begin? Did the Bankruptcy Court approve the proposed solicitation?

Yes, there are two solicitations currently in process.

On June 29, 2016, the Bankruptcy Court entered an order approving the solicitation of the Trustee’s Plan and on July 14, 2016, the Bankruptcy Court entered an order approving the solicitation of the Transparency Plan.

The Trustee commenced solicitation on the Trustee Plan on July 14, 2016, while Transparency commenced solicitation on the Transparency Plan on July 22, 2016.

As a result you may have received (or will receive) two sets of solicitation materials including two different ballots.

2.7 Why have I received so many documents? I cannot understand why I am getting so much mail.

You are receiving plans, disclosure statements, ballots, and notices relating to both the Chapter 11 Trustee’s Plan as well as the Transparency Plan. Some of these documents are lengthy. Both the Chapter 11 Trustee and Creditors’ Committee and Transparency are obligated to send you these materials.

Because Transparency believes its plan provides considerably better terms and recoveries than the Chapter 11 Trustee Plan, we encourage you to focus your attention on reviewing and voting in favor of the Transparency Plan. We also encourage you to vote against the Chapter 11 Trustee Plan.

2.8 What is the Voting Deadline for the Trustee Plan?

Please call the Trustee’s Ballot Agent, Epiq, at (866) 841-7869 (toll free) or (503) 597-5539. You can also email them at LPVOTE@epiqsystems.com.

2.9 Where do I send my ballots for voting on the Trustee Plan?

Please call the Trustee’s Ballot Agent, Epiq, at (866) 841-7869 (toll free) or (503) 597-5539. You can also email them at LPVOTE@epiqsystems.com.

2.10 What is the Voting Deadline for the Transparency Plan?

The Voting Deadline on the Transparency Plan is 5:00 PM Central Time on August 22, 2016. You must submit your ballot consistent with the Court order so that it is received by Transparency’s balloting agent (Prime Clerk) no later than 5:00 PM Central time on August 22, 2016.

2.11 Where do I send my ballots for voting on the Transparency Plan?

You must submit your ballot on the Transparency Plan to the following address:

Life Partners Ballot/Election Processing Center,
c/o Prime Clerk LLC,
830 3rd Avenue, 9th Floor
New York, New York 10022

2.12 Are the Transparency Plan and Transparency Disclosure Statement duplicative of the Trustee Plan and Trustee Disclosure Statement?

No. The Transparency Disclosure Statement is not a duplicate of the Trustee Disclosure Statement, and the Transparency Plan is not a duplicate of the Trustee Plan. The Transparency Plan is in competition with the Trustee Plan for your support.

Even if you have already cast a vote either for or against the Trustee Plan, you may also vote to support the Transparency Plan. Ultimately, however, the Court will confirm only one of the Plans.

2.13 Are the terms of the Transparency Plan the same as the terms of the Trustee Plan?

While many of the provisions in the Transparency Plan and the Trustee Plan may appear similar, there are substantial, material differences between the two that requires your careful consideration. These differences may have a substantial impact on the treatment of (and recovery on) your claim.

Transparency believes that the Transparency Plan provides superior prospects for recovery for holders of claims and encourages you to vote for (or to accept) the Transparency Plan and vote against (or to reject) the Trustee Plan.

For example:

  • Protection Against Future Bankruptcy:
    • The Transparency Plan ensures that these policies do not end up in bankruptcy again; it makes $85 million permanently available to ensure that the investors don’t have to go through this again.
    • Under the Trustee’s Plan, there is only temporary financing that lasts for three years. So if there is a premium shortfall in year 4, there is a chance that everyone could have to go through this whole bankruptcy ordeal again.
  • Duration of the Plans
    • Under the Transparency Plan, investors will receive the value of their investments within 12 years.
    • Under the Trustee’s Plan, they can hold onto your investment for up to 30 years.
  • World Class Asset Management, Along with Checks and Balances:
    • Under the Transparency Plan, the policies will be managed by the principals of BroadRiver Asset Management. BroadRiver has un-equaled industry expertise, and is the globally-recognized leader in life settlement portfolio management. Under the Transparency Plan, there are also independent, third party servicers that have serviced billions of dollars of policies before. This structure – management with BroadRiver, servicing with independent third parties – provides checks and balances, so that independent parties are constantly checking each other’s numbers.
    • The structure is very different under the Trustee’s Plan. All of the management and the servicing is taken care of by one party – Vida. And not because Vida is the best – it isn’t. Vida had its own plan, and was opposing the Trustee’s Plan, until the Trustee and Vida struck a deal. As a result of that deal, Vida dropped its plan and joined forces with the Trustee as the manager and the servicer. There are no checks and balances.
    • To make matters worse, Vida is more expensive. Investors are estimated to pay $48.1 million for Vida’s services under the Trustee Plan, and these fees are not capped -- they could be more. Under the Transparency Plan, the management and servicing is only estimated to cost $29.8 million – that’s almost a $20 million savings for investors under the Transparency. Plus, under the Transparency Plan, these fees are capped. Even in the busiest of years, the management and servicing will never exceed $5 million.
  • Continuing Interest Holders: No forced contribution of 5% under Transparency Plan.
    • Both plans allow investors to pool their investments with other investments under the “Position Holder Trust.” Both plans also allow investors to hold onto their individual investments if they want to.
    • If you want to hold onto your individual investment, the Transparency Plan provides you with the better deal. The Trustee’s Plan requires all investors to contribute 5% of their investments to the trust, so even if you want to keep your investment, you can only keep 95% of it. And another 2.8% will be deducted to pay Vida when your policy matures.
    • Transparency Plan doesn’t require this. There is no 95%-5% split. If you want to keep your investment, you keep 100% of the maturities.
  • Continuing Interest Holders: no forced sale
    • Under the Transparency Plan, if you are an investor who has made the “Continuing Interest Holder” election or the “Note” election, and you have thereby decided to maintain your individual investment, then you will be able to maintain that investment until the policy matures. Yes, Transparency will be selling all remaining policies when the plan terminates in 10 to 12 years, but as part of the plan, Transparency will have to establish a new servicer for you.
    • Under the Trustee Plan, there is no similar mechanism. The Trustee will be able to sell all of the policies after 10 years, after 15 years, after 20 years, all the way up to 30 years. And when he does so, you won’t be able to maintain your individual investment.
  • Continuing Interest Holders 20% vs. 10% default cost.
    • If you want to hold onto your investment and not pool, under both plans, you will be required to pay your ongoing premiums.
    • If you eventually stop paying those premiums, under both plans, your investment will go into the pool.
    • Under the Trustee’s Plan, there is a 20% penalty when that happens. Under the Transparency Plan, there is only a 10% charge.
  • Escrowed Maturities
    • If your policy has already matured, or if it matures prior to the Effective Date of the Plans, the Transparency Plan pays all of those funds back to you right away.
    • That’s not the case under the Trustee’s Plan. At best, it is unclear for how long the Trustee is going to hold onto your funds.
  • Scrutinize Professional Fees
    • Under the Transparency Plan, a “Fee Examiner” will be appointed to carefully scrutinize all of the professional fees, including the lawyers’ fees and the Trustee’s fees, that have been incurred in this case.
    • Under the Trustee’s Plan, there is indication that anyone is going to object to the professional fees.
  • Other Differences / Roadshow:
    • There are a number of other differences. We encourage you to read both plans carefully.
    • We also encourage you to attend one of the roadshows that Transparency has scheduled to provide more information about its Plan. You can find more information for these roadshows and sign up at www.transparencyalliance.net.

2.14 Is it sufficient for me simply to vote for the Transparency Plan?

No. While voting in favor (or to “accept”) the Transparency Plan is an important step, you should also vote against (or to “reject”) the Trustee Plan.

If you do not vote to reject the Trustee Plan, you risk the Court confirming the Trustee Plan and being bound to unfavorable terms.

2.15 Who or what is Transparency?

Transparency Alliance (often referred to as the “Plan Proponent”) is not a Debtor and not affiliated with the Debtors. Transparency is a creditor of Life Partners and has a claim against Life Partners just like you.

Transparency is an affiliate of BroadRiver Asset Management, L.P.—a leader in the niche, highly-complex industry of life settlement investments.

This is an important fact because Transparency and BroadRiver brought and will continue to bring all their industry expertise to bear in crafting and implementing the sound restructuring plan embodied in the Transparency Plan. Like all of the Debtors’ creditors, Transparency wants to see favorable recoveries for those people and entities adversely affected by Life Partners’ dealings.

2.16 Can you tell me more about BroadRiver?

BroadRiver is registered with the SEC as an Investment Adviser and has robust asset management systems, compliance controls, risk management, and operational depth in life settlement investment management. BroadRiver’s principals pioneered the modernization of the life settlement space through the establishment of best practices for brokers and providers and in the field of consumers protections, contractual standard, institutional-level analytics, and actuarial research.

You may be interested to learn that among other accomplishments, BroadRiver’s team has (i) invested more than $700 million of capital in life settlements; (ii) analyzed over 50,000 policies with over $80 billion in face value (including distressed portfolios); (iii) built finely-tuned portfolios for institutional investors, stressing realistic mortality assumptions and steady cash flow; and (iv) designed robust proprietary information technology platforms for analysis and management of life settlements.

2.17 Why should I favor a plan drafted by Transparency Alliance and BroadRiver?

The Transparency Plan will utilize Transparency’s and BroadRiver’s extensive expertise to maximize the value of the Policies and provide the Fractional Interest Holders with returns that are superior to the returns being offered by alternative scenarios.

See 2.13

2.18 What commitment is Transparency and BroadRiver making pursuant to the Transparency Plan? How do I know that Transparency and BroadRiver have the creditors’ best interests in mind?

Transparency and BroadRiver are offering their sophisticated expertise to maximize the value of the Policies that serve as the source of funds to pay the Debtors’ creditors. Transparency and BroadRiver will conduct their work with the assistance of independent, third-party servicers and under the guidance of an independent Advisory Board.

Moreover, the Transparency and BroadRiver are making a significant financial contribution towards the viability of the Transparency Plan including:

  • $10 million loan to Life Partners’ creditors after the confirmation of the Transparency Plan
  • $75 million in loans available to Life Partners’ creditors on and after the Effective Date

2.19 What is the independent “Advisory Board”?

The Transparency Plan contemplates the installation of an independent, third-party advisory board consisting of five members with relevant industry expertise that will play a critical role in the implementation of the Transparency Plan. The biographies of these experts can be found in the Transparency Disclosure Statement.

This independent oversight (and the checks and balances provided by this oversight) is an additional reason to support the Transparency Plan.

2.20 Was there ever another plan? A “third” plan?

Yes, Vida Capital, Inc. submitted a “third” proposed plan on April 5, 2015, but later withdrew its plan after it struck a lucrative deal with the Trustee to become the servicer under the Trustee’s Plan.

Now, there are only two proposed plans—Transparency’s Plan and the Trustee’s Plan.

2.21 What are the main features of the Transparency Plan?

The Transparency Plan creates three separate “Trusts” from which creditors get paid: (i) the Policy Recovery Trust, (ii) the Position Holder Trust, and (iii) the Creditors’ Trust.

The Transparency Plan also provides individual investors with choices regarding how they want to be treated.

  • Individual investors can choose to “pool” their interests, so that they don’t have to pay premiums and expenses after the effective date. Over time, they will get regular distributions from the pooled investments when the policies that have been pooled matured.
  • Or, if an investor wants to keep his investment, the investor can choose to do so. When that policy matures, the investor will get the maturity proceeds. But, the investor will have to continue to make premium and expenses payments after the Effective Date until the policy matures.
  • Lastly, most investors will be allowed to rescind their investments altogether if they want to. Investors that choose this option will get a share in recoveries from lawsuits initiated on behalf of the bankruptcy estate after the Plan is confirmed.


Critically, under the Transparency Plan, all of this is backed up by BroadRiver Asset Management – a world leader in investment management. They are providing unique expertise to maximize the value of the policies and to help the investors that were defrauded.

2.22 What is the “Policy Recovery Trust”?

The Policy Recovery Trust will come into existence on the Effective Date of the Plan and will manage the life insurance policies held by the Debtors. When the policies mature, the Policy Recovery Trustee will distribute the maturities from the policies to the investors in accordance with section 5.06 of the Transparency Plan.

2.23 Who will serve as the Policy Recovery Trustee?

An affiliate of Transparency will serve as the Policy Recovery Trustee.

2.24 What is the Position Holder Trust?

The Position Holder Trust will come into existence on the Effective Date and will receive certain proceeds from the Policy Recovery Trust. The Position Holder Trustee will then distribute these proceeds to “Unit Holders”—those investors who pool their investments by making the “Position Holder Trust Election”.

The Position Holder Trust offers substantial benefits to investors by “pooling” their investments and diversifying their prospects for recovery. Investors who choose to pool will tie their recoveries to the performance of all of the policies in the pool, instead of only one. Plus, investors who pool their investments will not have to pay premiums and expenses on these policies after the effective date of the Transparency Plan. All of those costs will be deducted from maturities – no more out of pocket payments.

2.25 Who will serve as the Position Holder Trustee?

An affiliate of Transparency will serve as the Position Holder Trustee and manage the Position Holder Trust in accordance with the Position Holder Trust Agreement.

2.26 What is the Creditors' Trust?

The Creditors’ Trust will come into existence on the Effective Date and will be vested with the Debtors’ “Causes of Action”—basically lawsuits that the Debtors can bring to recover certain assets. The Creditors’ Trust will prosecute these Causes of Action. If the Creditors’ Trust prevails and is awarded recoveries, it will distribute these recoveries to holders of General Unsecured Claims and Fractional Interest Holders who exercise the “Rescission Election”. If these lawsuits don’t generate at least $10 million in proceeds, the Creditor’s Trust will receive up to $10 million to distribute to creditors.

2.27 Who will manage the Creditor’s Trust?

The Creditors’ Trust will be managed by the Creditors’ Trustee in accordance with the Creditors’ Trust Agreement.

2.28 Who will serve as the Creditors’ Trustee?

The Creditors’ Trustee will be Michael A. McConnell, a former U.S. Bankruptcy Judge for the Northern District of Texas. Mr. McConnell is not affiliated with Transparency.

2.29 What is a “Fractional Interest Holder”?

A Fractional Interest Holder is essentially an investor. Technically, it is a holder of an interest in one of the life insurance policies or the holder of a promissory note or similar obligation purchased through a retirement account and secured by Fractional Interests. The latter is referred to as an “IRA Holder”.

2.30 What is a “Fractional Interest”?

A Fractional Interest means an interest in a life insurance policy or in the death benefits payable thereunder.

2.31 What is a "Policy"?

A Policy means a life insurance policy (whether termed a “life settlement”, a “viatical” or otherwise) in which any of the Debtors hold an interest of any kind or nature, or in which the Debtors sold an interest to investors in the course of their business.

2.32 What are the options for Fractional Interest Holders under the Transparency Plan?

The Transparency Plan provides Fractional Interest Holders with the freedom to elect from various recovery options. The options vary depending on whether a Fractional Interest Holder directly purchased Fractional Interests or indirectly purchased Fractional Interests through an individual retirement account (“IRA Holders”).

Regardless of the option selected, the recoveries received by the Fractional Interest Holders will be in full and final satisfaction, settlement, release, and discharge of the Claims asserted by the Fractional Interest Holders against the Debtors’ Estates.

In general, investors have three options.

  • Individual investors can choose to “pool” their interests, so that they don’t have to pay premiums and expenses after the effective date. This is called the “Position Holder Trust Election.” Over time, they will get regular distributions from the pooled investments when the policies that have been pooled matured.
  • Or, if an investor wants to keep his investment, the investor can choose to do so by either electing to be a “Continuing Interest Holder.” If you are an IRA Investor, you can also elect to receive a “Class B3 Note.” When that policy matures, the investor will get the maturity proceeds. But, the investor will have to continue to make premium and expenses payments after the Effective Date until the policy matures.
  • Lastly, most investors will be allowed to rescind their investments altogether if they want to. Investors that choose this option will get a share in recoveries from lawsuits initiated on behalf of the bankruptcy estate after the Plan is confirmed.
  • RECOMMENDATION: Some investors may want to hold onto their individual investments because they have a large, diversified portfolio of interests already, or because they simply are simply maintaining their specific positions. For most investors, however, Transparency strongly recommends that they pool their investments. When investors pool, their recoveries will NOT be tied to one policy. They will be tied to ALL of the policies. Additionally, investors will not have to pay any more premiums or servicing fees out of pocket.

    Investors can choose to pool their interests by marking the “Position Holder Trust” box on the ballot received in the mail.

Voting and Treatment of Claims

2.33 Do I need to vote to accept a plan to receive the treatment allotted under the Plan?

You are encouraged to vote to accept the Transparency Plan, because it provides the most favorable recoveries to creditors; however, if you do not vote and the Court confirms the Transparency Plan, you will still be bound by its terms.

Most importantly, by not voting to accept the Transparency Plan, you run the risk of the Court confirming the Trustee Plan and being bound by those terms.

2.34 I have a Secured Claim against LPHI (Class A1). Am I entitled to vote on the Transparency Plan?

No. Pursuant to the Transparency Plan, Class A1 is unimpaired and deemed to accept the Transparency Plan. Therefore, you are not entitled to vote.

2.35 I have a Secured Claim against LPHI (Class A1), what will I receive if the Court confirms the Transparency Alliance plan?

If the Court confirms the Transparency Plan and your Claim is allowed, you will receive, at the Creditors’ Trustee’s option, either (i) payment full in cash, (ii) delivery of your collateral, (iii) reinstatement of your claim, or (iv) such other treatment that renders your claim unimpaired.

Please see section 3.06 of the Transparency Plan for further detail.

2.36 I have a General Unsecured Claim against LPHI (Class A2). Am I entitled to vote on the Transparency Plan?

Yes, you are entitled to cast a ballot on the Transparency Plan. For your vote to count, you must complete, execute, and deliver your Transparency Plan ballot to the Balloting Agent (Prime Clerk) so that your ballot is received by the Balloting Agent by 5:00 PM Central Time on August 22, 2016.

2.37 I have a General Unsecured Claim against LPHI (Class A2), what will I receive if the Court confirms the Transparency Alliance plan?

If the Court confirms the Transparency Plan and your Claim is allowed, you will receive, a Creditors’ Trust Interest up to the Allowed amount of your claim as described in section 7.06 of the Transparency Plan

Please see section 3.06 of the Transparency Plan for further detail.

2.38 I have a SEC Judgment Claim against LPHI (Class A3). Am I entitled to vote on the Transparency Plan?

Yes, you are entitled to cast a ballot on the Transparency Plan. Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.39 I have a SEC Judgment Claim against LPHI (Class A3), what will I receive if the Court confirms the Transparency Alliance plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.40 I have an Intercompany Claim against LPHI (Class A4). Am I entitled to vote on the Transparency Plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.41 I have an Intercompany Claim against LPHI (Class A4), what will I receive if the Court confirms the Transparency Plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.42 I have an Interest in LPHI (Class A5). Am I entitled to vote on the Transparency Plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.43 I have an Interest in LPHI (Class A5), what will I receive if the Court confirms the Transparency Alliance plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.44 I have a Secured Claim against LPI (Class B1). Am I entitled to vote on the Transparency Plan?

No. Pursuant to the Transparency Plan, Class B1 is unimpaired and deemed to accept the Transparency Plan. Therefore, you are not entitled to vote.

2.45 I have a Secured Claim against LPI (Class B1), what will I receive if the Court confirms the Transparency Alliance plan?

If the Court confirms the Transparency Plan and your Claim is allowed, you will receive, at the Creditors’ Trustee’s option, either (i) payment full in cash, (ii) delivery of your collateral, (iii) reinstatement of your claim, or (iv) such other treatment that renders your claim unimpaired.

Please see section 3.07 of the Transparency Plan for further detail.

2.46 I have a Fractional Interest Holder Claim against LPI. Into which class do I fall? Am I entitled to vote?

The classification of your claim depends upon (i) whether you hold your Fractional Interest directly or indirectly through an IRA and (ii) whether you are an “Ownership Settlement Subclass Member” and “Rescission Settlement Subclass Member” or only an “Ownership Settlement Subclass Member”.

  • Holds Fractional Interests Directly
    • Ownership Settlement Subclass Member and Rescission Settlement Subclass Member
    • Class B2
  • Holds Fractional Interests Directly
    • Ownership Settlement Subclass Member only
    • Class B2A
  • Holds Fractional Interests Through IRA
    • Ownership Settlement Subclass Member and Rescission Settlement Subclass Member
    • Class B3
  • Holds Fractional Interests Through IRA
    • Ownership Settlement Subclass Member only
    • Class B3A
Please review your ballot carefully. It should tell you which class you are in.

2.47 Who is an “Ownership Settlement Subclass Member”?

An Ownership Settlement Subclass Member is a person who belongs to the subclass of investors proposed to be certified for settlement purposes under the Class Action Settlement Agreement. We suggest you review the definition of this term as it is set forth in the Transparency Plan.

2.48 Who is a “Rescission Settlement Subclass Member”?

A Rescission Settlement Subclass Member is a person who belongs to the subclass of investors proposed to be certified for settlement purposes under the Class Action Settlement Agreement. We suggest you review the definition of this term as it is set forth in the Transparency Plan.

2.49 I have a Fractional Interest Holder Claim against LPI, am not an IRA Holder, and I am both an Ownership Settlement Subclass Member and Rescission Settlement Subclass Member. Am I entitled to vote on the Transparency Plan?

Yes, you fall within Class B2 and are entitled to cast a ballot on the Transparency Plan. Please be advised that for your vote to count, you must complete, execute, and deliver your Transparency Plan ballot to the Balloting Agent so that your ballot is received by the Balloting Agent (Prime Clerk) by 5:00 PM Central Time on August 22, 2016.

2.50 I have a Fractional Interest Holder Claim against LPI, am not an IRA Holder, and I am both an Ownership Settlement Subclass Member and Rescission Settlement Subclass Member. What will I receive if the Court confirms the Transparency Plan?

You fall within Class B2, and the Transparency Plan provides you with three options for how you may receive your recovery on account of your Fractional Interest(s).

First Option

You can become a “Continuing Interest Holder” by exchanging your Fractional Interests for a “Certificate of Continuing Interests”.

In general terms, the Certificate of Continuing Interests allows you to keep your individual investment in whatever policy you invested in prior to the bankruptcy. If you exercise that option, you will have to continue to pay premiums and servicing costs for your policy until your policy matures.

Please see the Plan for more detail.

Second Option

Alternatively, you can make the “Position Holder Trust Election”, which will “pool” your Fractional Interests with other policies in the in the Position Holder Trust.

In exchange, you will receive “units” in the Position Holder Trust, which will entitle you to regular distributions from the Trust as polices in the Trust mature. These distributions will be made quarterly (four times a year).

The number of Units you will receive in exchange for your Fractional Interests will be calculated in accordance with section 6.03 of the Plan. You will not have to pay premiums and servicing costs out of pocket – all of that will be paid by the pool.

Some investors may want to hold onto their individual investments because they have a large, diversified portfolio of interests already, or because they simply are simply maintaining their specific positions.

For most investors, however, Transparency strongly recommends that you pool your interest by making the “Position Holder Trust Election” on your ballot. The Position Holder Trust offers substantial benefits to Fractional Interest Holders who elect to become Unit Holders.

First, it will “pool” a large number of policies together. This exposes you to less risk because nor recovery will not be tied to the performance of one particular Policy. Instead, they will be tied to the overall performance of all of the Policies in the Position Holder Trust.

Second, by making the Position Holder Trust Election, you won’t have to pay premiums and expense out of pocket after the Plan goes effective. The Position Holder Trust will receive the benefits of the Exit Financing Facility, which will cover these expenses.

Please see the Plan for more detail.

Third Option

You may make the “Rescission Election”.

By exercising the Rescission Election, you may elect to rescind the transaction pursuant to which you acquired rights to and/or interests in the Fractional Interests and rescind the related Investment Contract. In doing so, you will be deemed to have irrevocably assigned, transferred, and abandoned your Fractional Interests.

In exchange, you will receive a Creditors’ Trust Interest calculated as provide in section 7.06 of the Plan. The Creditors’ Trust Interest will allow you to receive a share of potential recoveries in the Causes of Action pursued by the Creditors’ Trustee.

2.51 I have a Fractional Interest Holder Claim against LPI, am not an IRA Holder, and I am solely an Ownership Settlement Subclass Member and not a Rescission Settlement Subclass Member. Am I entitled to vote on the Transparency Plan?

You fall within Class B2A, and the Transparency Plan provides you with two options for how you may receive your recovery on account of your Fractional Interest(s).

First Option

You can become a “Continuing Interest Holder” by exchanging your Fractional Interests for a “Certificate of Continuing Interests”.

In general terms, the Certificate of Continuing Interests allows you to keep your individual investment in whatever policy you invested in prior to the bankruptcy. If you exercise that option, you will have to continue to pay premiums and servicing costs for your policy until your policy matures.

Please see the Plan for more detail.

Second Option

Alternatively, you can make the “Position Holder Trust Election”, which will “pool” your Fractional Interests with other policies in the in the Position Holder Trust.

In exchange, you will receive “units” in the Position Holder Trust, which will entitle you to regular distributions from the Trust as polices in the Trust mature. These distributions will be made quarterly (four times a year).

The number of Units you will receive in exchange for your Fractional Interests will be calculated in accordance with section 6.03 of the Plan. You will not have to pay premiums and servicing costs out of pocket – all of that will be paid by the pool.

Some investors may want to hold onto their individual investments because they have a large, diversified portfolio of interests already, or because they simply are simply maintaining their specific positions.

For most investors, however, Transparency strongly recommends that you pool your interest by making the “Position Holder Trust Election” on your ballot. The Position Holder Trust offers substantial benefits to Fractional Interest Holders who elect to become Unit Holders.

First, it will “pool” a large number of policies together. This exposes you to less risk because nor recovery will not be tied to the performance of one particular Policy. Instead, they will be tied to the overall performance of all of the Policies in the Position Holder Trust.

Second, by making the Position Holder Trust Election, you won’t have to pay premiums and expense out of pocket after the Plan goes effective. The Position Holder Trust will receive the benefits of the Exit Financing Facility, which will cover these expenses.

Please see the Plan for more details.

2.53 I hold more than one Fractional Interest. Do I need to make consistent elections on account of all my Fractional Interests?

No. Elections can be made on a Fractional Interest-by-Fractional Interest basis.

2.54 I hold Fractional Interests. What election should I make under the Transparency Plan?

Some investors may want to hold onto their individual investments because they have a large, diversified portfolio of interests already, or because they simply are simply maintaining their specific positions.

For most investors, however, Transparency strongly recommends that you pool your interest by making the “Position Holder Trust Election” on your ballot. The Position Holder Trust offers substantial benefits to Fractional Interest Holders who elect to become Unit Holders.

First, it will “pool” a large number of policies together. This exposes you to less risk because nor recovery will not be tied to the performance of one particular Policy. Instead, they will be tied to the overall performance of all of the Policies in the Position Holder Trust.

Second, by making the Position Holder Trust Election, you won’t have to pay premiums and expense out of pocket after the Plan goes effective. The Position Holder Trust will receive the benefits of the Exit Financing Facility, which will cover these expenses.

2.55 I have an IRA Holder Claim against LPI and I am both an Ownership Settlement Subclass Member and a Rescission Settlement Subclass Member. Am I entitled to vote on the Plan?

Yes, you fall within Class B3 and are entitled to cast a ballot on the Transparency Plan. Please be advised that for your vote to count, you must complete, execute, and deliver your Transparency Plan ballot to the Balloting Agent (Prime Clerk) so that your ballot is received by the Balloting Agent by 5:00 PM Central Time on August 22, 2016.

2.56 I have an IRA Holder Claim against LPI and I am both an Ownership Settlement Subclass Member and Rescission Settlement Subclass Member. What will I receive if the Court confirms the Transparency Plan?

You fall within Class B3, and the Transparency Plan provides you with four possible options to receive your recovery on account of your Prepetition IRA Note.

First Option

You can become a “Continuing Interest Holder” by exchanging your Prepetition IRA Note for a “Certificate of Continuing Interest”.

In general terms, the Certificate of Continuing Interests allows you to keep your individual investment in whatever policy you invested in prior to the bankruptcy. If you exercise that option, you will have to continue to pay premiums and servicing costs for your policy until your policy matures.

Please see the Plan for more detail.

Second Option

Alternatively, you can make the “Position Holder Trust Election”, which will “pool” your Fractional Interests with other policies in the in the Position Holder Trust.

In exchange, you will receive “units” in the Position Holder Trust, which will entitle you to regular distributions from the Trust as polices in the Trust mature. These distributions will be made quarterly (four times a year).

The number of Units you will receive in exchange for your Fractional Interests will be calculated in accordance with section 6.03 of the Plan. You will not have to pay premiums and servicing costs out of pocket – all of that will be paid by the pool.

Transparency strongly recommends that you choose this option because your chances of recovery will no longer be tied to one policy, and you won’t have to pay any more money out of pocket.

Please see the Plan for more detail.

Third Option

An IRA Holder may choose to exchange its Prepetition IRA Note for a Class B3 Note. The principal amount of a Class B3 Note will equal the aggregate of the Fractional Death Benefits due under your Prepetition IRA Note.

Like with the “Continuing Interest Holder” Election, if you choose the “Note Election,” your interest in whatever policy you invested in prior to the bankruptcy. If you exercise that option, you will have to continue to pay premiums and servicing costs for your policy until your policy matures.

As described in greater detail in the Transparency Disclosure Statement, there are potentially severe tax consequences associated with electing to receive a Class B3 Note. If, at or before the Confirmation Hearing, the Bankruptcy Court determines that the Class B3 Notes may not be issued pursuant to the Plan, then any IRA Holder who made this election to receive a Class B3 Note will be deemed to have made a Position Holder Trust Election.

Please see the Transparency Plan for more detail.

Fourth Option

You may make the “Rescission Election”.

By exercising the Rescission Election, you may elect to rescind the transaction pursuant to which you acquired rights to and/or interests in the Fractional Interests and rescind the related Investment Contract. In doing so, you will be deemed to have irrevocably assigned, transferred, and abandoned your Fractional Interests.

In exchange, you will receive a Creditors’ Trust Interest calculated as provide in section 7.06 of the Plan. The Creditors’ Trust Interest will allow you to receive a share of potential recoveries in the Causes of Action pursued by the Creditors’ Trustee

2.57 I have an IRA Holder Claim against LPI and I am an Ownership Settlement Subclass Member but not a Rescission Settlement Subclass Member. Am I entitled to vote on the Plan?

Yes, you fall within Class B3A are entitled to cast a ballot on the Transparency Plan. Please be advised that for your vote to count, you must complete, execute, and deliver your Transparency Plan ballot to the Balloting Agent (Prime Clerk) so that your ballot is received by the Balloting Agent by 5:00 PM Central Time on August 22, 2016.

2.58 I have an IRA Holder Claim against LPI and I am an Ownership Settlement Subclass Member but not a Rescission Settlement Subclass Member. What will I receive if the Court confirms the Transparency Plan?

You fall within Class B3A, and the Transparency Plan provides you with three possible options to receive your recovery on account of your Prepetition IRA Note.

First Option

You can become a “Continuing Interest Holder” by exchanging your Prepetition IRA Note for a “Certificate of Continuing Interest”.

In general terms, the Certificate of Continuing Interests allows you to keep your individual investment in whatever policy you invested in prior to the bankruptcy. If you exercise that option, you will have to continue to pay premiums and servicing costs for your policy until your policy matures.

Please see the Plan for more detail.

Second Option

Alternatively, you can make the “Position Holder Trust Election” and exchange your Prepetition IRA Notes for Units in Position Holder Trust. This allows you to “pool” your Fractional Interests with other policies in the in the Position Holder Trust.

In exchange, you will receive “units” in the Position Holder Trust, which will entitle you to regular distributions from the Trust as polices in the Trust mature. These distributions will be made quarterly (four times a year).

The number of Units you will receive in exchange for your Fractional Interests will be calculated in accordance with section 6.03 of the Plan. You will not have to pay premiums and servicing costs out of pocket – all of that will be paid by the pool.

Transparency strongly recommends that you choose this option because your chances of recovery will no longer be tied to one policy, and you won’t have to pay any more money out of pocket.

Please see the Plan for more detail.

Third Option

An IRA Holder may choose to exchange its Prepetition IRA Note for a Class B3 Note. The principal amount of a Class B3 Note will equal the aggregate of the Fractional Death Benefits due under your Prepetition IRA Note.

Like with the “Continuing Interest Holder” Election, if you choose the “Note Election,” your interest in whatever policy you invested in prior to the bankruptcy. If you exercise that option, you will have to continue to pay premiums and servicing costs for your policy until your policy matures.

As described in greater detail in the Transparency Disclosure Statement, there are potentially severe tax consequences associated with electing to receive a Class B3 Note. If, at or before the Confirmation Hearing, the Bankruptcy Court determines that the Class B3 Notes may not be issued pursuant to the Plan, then any IRA Holder who made this election to receive a Class B3 Note will be deemed to have made a Position Holder Trust Election.

Please see the Transparency Plan for more detail.

2.59 I have a General Unsecured Claim against LPI (Class B4). Am I entitled to vote on the Transparency Plan?

Yes, you are entitled to cast a ballot on the Transparency Plan. Please be advised that for your vote to count, you must complete, execute, and deliver your Transparency Plan ballot to the Balloting Agent so that your ballot is received by the Balloting Agent by 5:00 PM Central Time on August 22, 2016.

2.60 I have a General Unsecured Claim against LPI (Class B4), what will I receive if the Court confirms the Transparency Alliance plan?

If the Court confirms the Transparency Plan and your Claim is allowed, you will receive, a Creditors’ Trust Interest up to the Allowed amount of your claim as described in section 7.06 of the Transparency Plan

Please see section 3.07 of the Transparency Plan for further detail.

2.61 I have an Intercompany Claim against LPI (Class B5). Am I entitled to vote on the Transparency Plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.62 I have an Intercompany Claim against LPI (Class B5), what will I receive if the Court confirms the Transparency Alliance plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.63 I have an Interest in LPI (Class B6), am I entitled to vote on the Transparency Plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.64 I have an Interest in LPI (Class B6), what will I receive if the Court confirms the Transparency Alliance plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.65 I have a Secured Claim against LPIFS (Class C1). Am I entitled to vote on the Transparency Plan?

No. Pursuant to the Transparency Plan, Class C1 is unimpaired and deemed to accept the Transparency Plan.

2.66 I have a Secured Claim against LPIFS (Class C1), what will I receive if the Court confirms the Transparency Alliance plan?

If the Court confirms the Transparency Plan and your Claim is allowed, you will receive, at the Creditors’ Trustee’s option, either (i) payment full in cash, (ii) delivery of your collateral, (iii) reinstatement of your claim, or (iv) such other treatment that renders your claim unimpaired.

Please see section 3.08 of the Transparency Plan for further detail.

2.67 I have a General Unsecured Claim against LPIFS (Class C2). Am I entitled to vote on the Transparency Plan?

Yes.

2.68 I have a General Unsecured Claim against LPIFS (Class C2), what will I receive if the Court confirms the Transparency Alliance plan?

If the Court confirms the Transparency Plan and your Claim is allowed, you will receive, a Creditors’ Trust Interest up to the Allowed amount of your claim as described in section 7.06 of the Transparency Plan

Please see section 3.08 of the Transparency Plan for further detail.

2.69 I have an Intercompany Claim against LPIFS (Class C3). Am I entitled to vote on the Transparency Plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.70 I have an Intercompany Claim against LPIFS (Class C3), what will I receive if the Court confirms the Transparency Alliance plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.71 I have an Interest in LPIFS (Class C4). Am I entitled to vote on the Transparency Plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.72 I have an Interest in LPIFS (Class C4), what will I receive if the Court confirms the Transparency Alliance plan?

Please call Locke Lord at (512) 305-4700 and ask for Berry Spears or Stephen Humeniuk. You can also call (312) 443-0700 and ask to speak with David Wirt, Aaron Smith, or Brian Raynor.

2.73 Is there a Class Action Settlement Under the Plan?

Yes. The Transparency Plan contemplates a settlement that is substantially similar to the settlement in the Trustee’s Plan. A copy of the settlement agreement is in the materials that you received in the mail.

2.74 What Role does Thomas Moran (the Chapter 11 Trustee) Play in the Transparency Plan?

None. When the Transparency Plan’s Effective Date occurs, the Chapter 11 Trustee will be discharged.

2.75 How much is Transparency (or BroadRiver) making under this Plan?

A full breakdown of the fees under the Transparency Plan is set out in the beginning of the Disclosure Statement. In general, Transparency/BroadRiver will receive around $1.9 million a year for bringing its expertise to bear and managing the multi-billion dollar policy portfolio. Transparency/BroadRiver will also receive an estimated amount, on average, of $4 million a year in compensation for bringing $85 million to rescue the policy portfolio, bring this case out of bankruptcy, and to ensure that it does not go back to bankruptcy.

Please note that no plans are free. These policies are in bankruptcy because the investors were defrauded. So yes, Transparency will earn compensation for its expertise. But overall, the Transparency Plan charges lower fees and expenses to investors than what the Trustee’s Plan charges.

2.76 I recently received a “Notice of Non-Voting Impaired Creditors,” but I also received a ballot. Why did I receive both documents? Can I vote on the Transparency Plan? The Notice says that I cannot.

Yes, you can vote on the Transparency Plan. The notice was sent to you in error, and you should disregard it entirely.

We strongly encourage you to vote in favor of the Transparency Plan using the ballot that you received in the mail. If you discarded or misplaced your ballot, or if you didn’t receive a ballot and you think you should have, please let us know so that we can take down your information and ensure that a replacement is sent to you right away.

As a reminder, you have to mail in your ballot so that it is actually received by the balloting agent no later than August 22, 2016. So you should try to send it in at least a week in advance.