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- The Trustee has not received from PCI the settlement pay due from PCI on June 15, 2010 in the amount of $833,333. PCI initially informed the Trustee that it intended to make this payment but that it was unable to do so due to a banking delay. The Trustee will post notice if and when this payment is made.
- On April 15, 2010, the Debtors' estates received from Provident Capital Indemnity, Ltd. a settlement payment in the amount of $243,750.00, in accordance with a settlement agreement between the Debtors and PCI approved by order of the Bankruptcy Court dated March 24, 2010. The Trustee looks forward to continuing to work with Provident Capital Indemnity, Ltd. under both settlement agreements approved by the Bankruptcy Court and with respect to all PCI bonds securing policies held by the Debtors' estates.
- INVITATION TO TELEPHONE REPORT BY TRUSTEE JEFF MARWIL - On April 7, 2010 at 1:00 p.m. central time, Chapter 11 Trustee Jeff Marwil will hold a listen only conference call to address creditors of and investors in the A&O / Life Fund bankruptcy cases. Please dial (800) 700-7784 and enter code 152421 to participate in this call. (If calling from outside of the United States, please dial (651) 291-1170 and enter code 152421.) Please RSVP by way of email to rrice@proskauer.com only if you plan to participate in this call. Although it is not necessary to RSVP in order to participate, doing so will allow us to make appropriate arrangements, ensure that all participants can be accommodated, and avoid unnecessary expense. You can submit questions or concerns to rrice@proskauer.com in advance of the call and we will attempt to address all items submitted. Due to the expected number of participants, live questions will not be taken.
- On March 24, 2010, the Court issued an order approving two settlements with Provident Capital Indemnity, Ltd. designed to bring approximately $11 million into the estates over the coming 18 months. The Trustee has already received the first payment due under these settlements and looks forward to continuing to work with Provident Capital Indemnity, Ltd. on these agreements and with respect to other PCI bonds securing policies held by the estates. On March 24, the Court also issued an order denying a motion that sought to dismiss or transfer the bankruptcy cases.
- On March 16, 2010, Trustee Jeff Marwil filed a statement regarding the pending motion to dismiss or transfer the bankruptcy cases.
- On March 11, 2010, Chapter 11 Trustee Jeff Marwil moved to retain Proskauer Rose LLP as his counsel.
- On March 8, in a written opinion, the Court Certified the election of Jeff Marwil as Chapter 11 Trustee. Patrick Collins, outgoing Trustee, has pledged his cooperation during a brief transition period. All investor inquiries and communications with the Trustee should now be directed to Jeff J. Marwil, c/o Renee Rice at rrice@proskauer.com.
- The Trustee filed a Motion requesting approval of a settlement he has reached with Provident Capital Indemnity ("PCI"). Among other things, the terms of two settlement agreements provide for installment payments totaling $11,000,000 in exchange for the transfer of two policies: (i) Policy #7016282, which has a face value of $1,000,000; and (ii) Policy #V1168732, which has a face value of $10,000,000. The payments are scheduled over a period of time beginning in March 2010 through May 15, 2011. While the settlement would resolve PCI's obligation with respect to two bonds issued in connection with policies owned by the Debtors' estates, it does not resolve, nor attempt to resolve, all of the potential obligations of PCI with respect to bonds issued to the Debtors, many of which do not mature until later years. The Trustee expects to have continuing discussions with PCI with respect to other policies and related bonds.
- Following the Texas Court's approval of the Trustee's settlement with the Receiver in a case in Texas, referenced below, the Trustee received funds totaling $621,900 in the first week of February. The funds are being held in the Trustee bank account. The Trustee expects additional funds from the settlement upon the sale of a house currently being marketed for sale by the Receiver.
- On January 22, 2010, a Texas court approved the Trustee's settlement with the Receiver in a case in Texas. This follows the Bankruptcy Court's approval of the settlement on December 18, 2009. The transcript of the hearing in the Bankruptcy court can be read here.
- Among other things, the terms of the settlement provide for (i) a $365,000 transfer to the Trustee for the benefit of the Debtors' estates; (ii) a 35% interest in an approximately $734,000 that the Receiver expects to receive from an Offshore Account; and (iii) a 35% interest in the proceeds of a residence owned by Adley Wahab. In addition, the settlement reserves the Trustee's right to assert certain claims for up to 20% of future assets that the Receiver may recover, provided that the Trustee can demonstrate a connection between those assets and A&O investor funds.
- On January 20, 2010, the Trustee filed a complaint against AVIVA, a life insurance carrier, seeking a determination that a particular policy should be considered to be in-force in light of protections available under applicable bankruptcy laws. AVIVA has asserted that the policy has lapsed.
- On January 13-14, 2010, the Court heard evidence on issues related to the disputed November 13, 2009 trustee election. The Court has asked for further briefing from the parties, and has continued the issue until March 8, 2010. The Court will determine who will be the trustee, and until such a decision, Patrick Collins will continue to serve as the trustee.
- The Trustee has filed a complaint, seeking recovery of investor funds, against Brent Oncale, Russell Mackert, Adley Abdulwahab, Christian Allmendinger, A&O Life Funds, LP, A&O Life Funds Management, LLC, and Shepherd Capital Management. The complaint was filed on Thursday, January 7, 2010, and asserts that the defendants looted and misapplied the funds of investors, and that the 2007 sale of the fund company itself was a sham, with certain of the defendants still remaining in control of the company and fraudulently transferring funds to themselves.