Life Partners Responds to Texas Lawsuit
WACO, Texas--(BUSINESS WIRE)--
Life Partners Holdings, Inc. (Nasdaq GS: LPHI), parent company of
Life Partners, Inc., announced today that the Texas Attorney General,
acting for the State Securities Board, filed suit against Life Partners,
Life Partners, Inc., its Chairman and President, Brian Pardo, and its
General Counsel, Scott Peden. Pardo and Peden are also directors of Life
Partners.
The suit seeks a temporary restraining order and appointment of receiver
based generally on allegations that Life Partners' life settlements are
securities under Texas law and that Life Partners made various
misrepresentations in the sale of the life settlements, including
misrepresentations about the life expectancies of the insureds.
Life Partners' Chairman, Brian Pardo, responded, "We deny the
allegations in the strongest possible terms. First, the Federal D.C.
Circuit Court of Appeals and Texas state courts have reviewed our life
settlements and ruled that they are not securities. Secondly, we did not
misrepresent our life settlements. The life expectancy estimates we
provided to purchasers were made by a third party in good faith."
Pardo continued, "The allegation that we are nearing insolvency is
spurious. It is speculation drawn from innuendo. The facts are that we
currently have more than $10 million in cash on hand, $45 million in
assets, and virtually no debt. Our financial ratios are solid, including
a better than 5:1 current ratio at the last quarter. Our business has
largely stabilized after the blow we suffered with the SEC enforcement
action last year. Our net cash used in operating activities was $(1.8)
million in the last quarter, $(1.9) million in the quarter preceding,
and has averaged $(1.86) million for the last five quarters. Through
sales of non-strategic assets in the last quarter, we increased our
overall net cash by $1.4 million and realized net income of over $1.0
million. Given our asset base and cash position, our financial losses
are manageable and do not threaten our ability to continue as a going
concern. The objective facts refute the outlandish and irresponsible
financial claims made in the suit."
Life Partners is the world's oldest and one of the most active
companies in the United States engaged in the secondary market for life
insurance, commonly called "life settlements." Since its incorporation
in 1991, Life Partners has completed over 143,000 transactions for its
worldwide client base of over 29,000 high net worth individuals and
institutions in connection with the purchase of over 6,500 policies
totaling approximately $3 billion in face value.
Visit our website at: www.lphi.com.
Safe Harbor - This press release contains certain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ
materially from those projected in the forward-looking statements as a
result of various factors. The statements in this news release that are
not historical statements, including statements regarding the basis,
outcome or duration of the legal proceeding, are forward-looking
statements within the meaning of the federal securities laws. These
statements are subject to numerous risks and uncertainties, many of
which are beyond our control, that could cause actual results to differ
materially from such statements. For information concerning these risks
and uncertainties, see our most recent Form 10-K. We disclaim any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as may be required by law.
LPHI-G
Life Partners Holdings, Inc.
Shareholder Relations, 254-751-7797
info@lifepartnersinc.com
Source: Life Partners Holdings, Inc.
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