EXAMINER MESSAGES

7/19/2006

Investors: The Court held a status hearing on Wednesday July 19.
Discussions concerned the timing of distributions.

It is probable that payments representing premium rebates will be made within the next 14 days.

Jordan claims that have been resolved should be paid within 45 days. I believe approximately 75% of the Jordan claims are included.

It is expected the balance of the claims approved will be distributed at least in part by the end of the year.

An additional hearing is set for Friday August 11 at 9:30 a.m.

If you have questions please contact me.

Andrew Storar, Examiner

7/18/2006

Investors: The Court will hold a telephone status conference on Wednesday 7/19 to discuss, among other things a timetable of commencing distributions including the Jordan distributions.
I'll report here when that is concluded.
Andrew Storar, Examiner

6/20/06

Investors: The sale of the portfolio has essentially closed. The purchase documents have been signed by the Receiver and Silverpoint and the money was wired to the Receiver's account on Monday 6/19.

I don't know at this time what this will do to the Tonti appeal. I suspect it is moot but I'll update you as I have further information.

Andrew Storar, Examiner

6/2/06

The Court has ordered that the Receiver sell the portfolio to Silverpoint pursuant to it's last bid. More details will follow soon.
Andrew Storar, Examiner

5/23/06

Investors: You have probably received the latest from Ernest Bustos again asking for money for his IP fund. He suggests that you investors can avoid the proposed sale of the portfolio by simply taking it over.
He fails to recognize that this is precisely what the receiver attempted to do when he sought investor participation in premium payments.
Unfortunately, most of you either could not or would not make those payments. As a result, the receiver does not have the four million dollars it takes to pay premiums for one year and sale is the only option. Before you consider sending Bustos money I suggest you demand to see the books of the IP fund to determine what he has done with the funds some have already sent and see if the fund has the capital necessary to make the premium payments.

Andrew Storar, Examiner

5/9/06

Investors: The Court held a hearing regarding several matters on 5/9.

As you know from previous postings, the Tonti Group has filed a motion to restructure their bid. This is in essence an increase in the bid and offers guaranteed sums as well as a cash alternative. Tonti's attorney spoke in favor of the motion and Silverpoint opposed it.

As an alternative, Tonti suggested the Court withhold ruling on the Fairness issue for at least 72 hours during which Tonti will attempt to negotiate a resolution with Silverpoint. The Judge indicated she would do this. I have no idea whether Silverpoint will negotiate, but the time is available.

Next was the fairness hearing. The Receiver described his familiarity with other portfolio sales and opined that the Silverpoint bid is fair and reasonable. The sale price approaches about 21% of investment dollars. After repayment of loans and other items the net to you should be in the 12%-13% range from the sale only. It is probable that other amounts from satellite litigation and other collection efforts will generate additional distributions in the future. It can't be said how much or when.

When the rulings come out, I'll post something here.

Contact me with questions or concerns.

Andrew Storar, Examiner

5/2/06

Investors: By way of supplement and correction of recent messages, be advised that the Silverpoint bid was $19,375,000.00 cash not $19,500,000.00. Also the recent motion by Tonti included the guaranteed payment over seven years, or in the alternative a cash payment of $19,500,000.00.
Both Silverpoint and Tonti agreed to pay March and April premiums as well.

Andrew Storar, Examiner

5/1/06

Investors: Today the Tonti Group filed a motion to restructure it's bid.
The motion is posted on this website for you to read. In essence Tonti wishes to guarantee payments interim payments to occur between the initial down payment and the final payment of $6.5 million resulting in a guaranteed payout of $27.5 million over the seven year period plus premium payments for March and April.

I expect Silverpointe will respond to this motion and I'll see that it is posted as well.

The fairness hearing remains set for May 9th.

Contact me with any questions or concerns.

Andrew Storar, Examiner

4/25/06

Investors: As many of you are aware, the Court issued its order last Friday finding that the highest and best bid was that of Silverpoint Capital. This is a "cash only" bid in that the Receivership will receive a one time payment of $19,500,000.00 plus an amount equal to the premium payments for March and April. The result is approximately $20,000,000.00.

There are certain deductions that will be made which include the Jordan settlement, paying off lenders, fees and costs. Additional sums will be set aside to pursue the bank and broker litigation as well as other collection efforts like the frozen Canadian funds. It is hoped that this satellite litigation will result in additional distributions to you.

A fairness hearing has been set for May 9, 2006. Please contact me with questions or concerns.

Andrew Storar, Examiner

4/14/06

Investors: The Court held two hearings on Thursday, April 13.

The first hearing was a fairness hearing regarding the proposed settlement of the Jordan issue. This involves the two matured Prudential policies. As a result of mediation it was proposed that the Receiver would pay the Jordan investors an amount equal to 62.5% of their investment related to the Jordan policies. In return, the Jordan investors would give a full and final release to the Receiver as concerns any claims related to their investment. The release does not cover your claims unrelated to Jordan nor does it include claims relative to payment of premiums.

The Court found the proposal fair and equitable. It was approved.
Distribution should begin within sixty days after funding of the sale of the balance of the portfolio provided claim forms have been submitted and approved. Unsubmitted claims will not hold up distribution to those that have completed the process.

The second hearing was a consideration of the highest and best bid for the balance of the portfolio.
At the hearing two bidders were present. SPCG (Silverpoint) has submitted a bid of $19,375,000.00 for the policies. This is a one time payment.

The Lorenzo Tonti fund submitted a phased bid. It consists of $12,000,000.00 upfront, 100% of all net cash flow exceeding $2,000,000.00 generated by maturities for the next seven years and a payment of $6,500,000.00 at the end of seven years.

Both bids are attractive. One is certain and give finality. The other is certain for $18,500,000.00 and provides an opportunity to share in maturities. The downside is that it lasts for seven years.

There was much evidence taken and the Court will probably decide next week. A fairness hearing on that decision is set for May 9 at 9:30 a.m.

If you have questions or thoughts let me know.

Andrew Storar, Examiner

3/28/06

Investors: A mediation was held regarding the Jordan policies on March 28, 2006 before Chief Magistrate Judge Michael Merz. Many investors related to the Jordan policies were in attendance along with some of their attorneys.

After nearly six hours of negotiations a tentative agreement was reached on the following terms:

1, Within sixty days of the funding of a sale of the portfolio the Receiver will pay the Jordan investors an amount equal to 62.5% of their Jordan related investment;

2. The Jordan investors will forever release all claims they may have to the Receivership estate as concerns their Jordan related investment;

3. In order to participate, Jordan investors must complete the claims form and process;

4. The matter is subject to the approval of Magistrate Judge Ovington who will hold a Fairness Hearing on April 13, 2006 at 9:30 a.m.
The hearing will be held in Courtroom #5 on the fifth floor of the Federal Building in Dayton, Ohio.

Anyone interested is free to attend the hearing.

Depending on the outcome of the bid consideration hearing on March 29,
2006 it is possible that a Fairness Hearing regarding the sale of the portfolio will be held immediately after the Jordan hearing.

You will receive notice of each by mail.

If you have any questions, concerns or comments please contact me.

Andrew Storar, Examiner

3/14/06

Jordan Investors: We had a status conference on March 8, 2006, and the Court has ordered this matter to mediation before Chief Magistrate Judge Michael Merz on March 28 at 9 a.m. Some of you have contacted me recently and agreed that settlement should at least be explored. Concern has also been expressed that those of you who are not represented are not being heard. Counsel for those represented should be in attendance. Those of you who are not represented may appear or I will be in attendance to convey and express your positions if you contact me by e-mail or letter. As I have indicated a number of times, I believe the loser in this matter will appeal; it will be lengthy and costly. If a resolution can be reached that avoids that process, everyone wins although perhaps not as much as they had hoped.

Andrew Storar
Examiner

3/14/06

Investors: At the status conference on March 8, 2006, the Receiver announced plans to put the entire portfolio up for sale through a bid process. You will be receiving individual notices by mail. The Receiver has a bid in place and the portfolio has been submitted for consideration throughout the Life Settlement industry for additional bids. You will have until March 24 to object to the process. A hearing will be held at 9 a.m. on March 29th to determine the highest and best bids. The Court may authorize sale at that point or defer for additional information. I will be receiving copies of the bids as submitted and will provide my opinion to the Court at the hearing. You may attend the hearing or forward me your thoughts on the process. The bid amounts will not be disclosed until the hearing so as not to impair the integrity of the bid process. As more information becomes available, it will be posted on this website.

Andrew Storar
Examiner

03/2/06

Investors ; Many of you have been calling and writing.

There is as yet no decision regarding the Jordan policies. Courts occasionally appear to move slowly for a variety of reasons including case overload. I can not speed that process up. I do still believe a settlement is the best option for all parties.

The Court has been considering contempt motion against several insurers and viators whose lack of cooperation has slowed the Receiver’s progress. The Receiver has been looking in to the sale of all or part of the portfolio although no deals have been concluded.

Other collection efforts such as the broker cases and the funds in Canada are ongoing.

Andrew Storar, Examiner

02/20/06

The Examiner has submitted an application for payment of fees in the
amount of $2,800.00. These fees concern the period of December, 2005.
During this period, the Examiner consulted with the Receiver and/or
counsel for the Receiver regarding various matters; had communications
with investors via telephone, letter and e-mail; reviewed
correspondence, documents and pleadings related to the subject case; and
consulted with the Court and attended a hearing in Dayton regarding
various matters.

02/20/06

The Examiner has submitted an application for payment of fees in the
amount of $4,668.75. These fees concern the period of November, 2005.
During this period, the Examiner consulted with the Receiver and/or
counsel for the Receiver on a number of occasions; had extensive
communications with investors via telephone, letter and e-mail; reviewed
correspondence, documents and pleadings related to the subject case; and
consulted with the Court and attended hearings in Dayton regarding
various matters.

02/17/06

The Examiner has submitted an application for payment of fees in the
amount of $3,597.50. These fees concern the period of January, 2006.
During this period, the Examiner consulted with the Receiver and/or
counsel for the Receiver on a number of occasions; communicated with
investors via telephone, letter and e-mail; reviewed correspondence,
documents and pleadings related to the subject case; and consulted with
the Court and attended hearings in Dayton regarding various matters.

02/09/06

The Examiner has submitted an application for payment of fees in the amount of $9,481.25 and costs in the amount of $785.69. These fees and costs concern the period of September, 2005. During this period, the Examiner consulted with counsel for the Receiver on a number of occasions; communicated with the Court regarding several issues; had extensive communications with investors via telephone, letter and e-mail; reviewed correspondence, documents and pleadings related to the subject case; prepared for and attended conference with Receiver; and attended hearings in Dayton regarding various matters. The costs are related to travel expenses incurred by the Examiner.

12/20/05

Investors: The Court held a status/motion hearing on 12/20/05.

The first matter addressed was the claims process. Approximately 2200 of you have returned the claim forms sent to you by the Receiver. For those who have not returned the forms I urge you to do so at once. Only when the forms are returned can data be compared and validated to insure your claim is part of the pool.

Out of the 2200 returned over 600 have been confirmed and the process is ongoing.

As I have earlier indicated, the Court, the Receiver and I continue to seek ways to reduce expenses while maintaining the portfolio. Obviously, premiums are the greatest expense. It is difficult to reduce that sum but the Receiver has obtained authority to negotiate the sale of several policies that have a high premium burden.

After considerable discussion it was decided that all professional bills submitted will be paid at 65% and the holdback will not be paid until certain financial conditions are met. Travel time will be billed at 50% of the approved rate.

The cases against the sales agents who brought you into LifeTime Capital are progressing as are the cases against the doctors who provided the life expectancies.

The next status conference is set for 1/19/06.

Should you have questions or concerns, please contact me.

Andrew Storar, Examiner

8/12/2005:

At my request the receiver will soon post a list of the policies in the portfolio including age and sex of the viator, face amount and annual premium. This should provide the additional information many of you have requested.
Andrew Storar, Examiner

8/5/2005:

Investors: Some potentially good news. I've been in discussions with a company that specializes in assisting victims of investment fraud obtain tax refunds. Our preliminary agreement is that they will do this on a contingent fee basis, that is, they only receive a fee if you get a refund. That fee will likely be 25% of the refund.

In the coming weeks you will receive a letter with contact information and a toll free number that is being set up just for LifeTime investors.
It is up to you if you want to contact them. At this point I am not providing them with information as to how to contact you so if you want to take advantage of this opportunity it is solely up to you.

They may not be able to help all of you. IRA's are generally outside the scope of their services.

In case you are wondering, I am not getting anything out of this other than my expenses for the mailing.

If you want additional information before you receive the letter, contact me.
Andrew Storar, Examiner

7/15/2005:

Investors: We had a telephone conference with the Court on Friday July 15. The main topic was the lack of maturities in the portfolio. As I indicated in a previous message, without maturities there is no source of funds to pay premiums to keep the policies from lapsing. Continued borrowing of funds is not a long term solution as the interest rates on this type of financing are exorbitant.

It is probable that the Receiver will contact you soon to reimplement your contributing to premium payments as was done before he was appointed. Details are being worked on regarding those payments having a priority status at the time of a distribution and the like.

Decisions will have to be made whether to maintain the portfolio or attempt to sell it. There are many, many factors to consider. I will be seeking permission of the Court to provide you with a substantial amount of information and conduct a survey of your preference regarding the future of the portfolio. I hope that will occur in the next 45 to 60 days.

Contact me if you have questions or concerns.

Andrew Storar, Examiner

6/23/2005:

Investors, David Svete and Ron Girardot were sentenced on June 23. Mr. Moran and I appeared on your behalf. We read many letters and impact statements to the Court.

Svete was sentenced to 19 ½ years consisting of 16 ½ in prison and 3 years supervised probation. His surrender date is Aug. 15.
In addition an order of forfeiture was entered in the amount of 21 million dollars which Mr. Moran will be designated as collector.

Girardot received 8 1/4 years, 5 1/4 in prison and 3 years supervised probation.

Additionally an order of restitution will be entered at a minimum of $100 million and maximum of $130 million as to each within the next 90 days.

We have been attempting to obtain documents and testimony from Svete's parents. We did have a partial deposition of William Svete at which time he produced six documents. We were told that he was invoking his Fifth Amendment privilege as to the balance. We asked the Court to intervene. An order was issued requiring a privilege log ( description of the documents) and set a briefing schedule.

I filed our brief and on Monday the Court ordered production of the documents and the Svete's to testify. I am advised by their counsel that they are evaluating their response to the Order.

From the logs it appears that the documents are financial in nature relating to two Svete related partnerships including about 27 certificates of deposit.

When we receive the documents, if permitted by the Court, I'll report as to their contents.

If you have questions, call or e-mail

Andrew Storar, Examiner

4/15/2005:

Investors: As you probably know David Svete and Ron Girardot have been found guilty on all counts in the criminal case in Florida. Since that time, the U.S. Attorney has sent Victim Impact Statements to many, if not all, of you. The Court will consider those statements at sentencing. You may forward your completed form to me and I'll see that the Court has it or you can forward it to the Receiver.

If you have not returned your claim forms to the Receiver please do so. Current information is essential when a distribution is made. If you have not received the claim forms please let me know asap.

There have been very few maturities and consequently little cash has been generated but there have been no policy lapses. The only options for the Receiver are maturities or sale of certain policies. This will probably need to be addressed in the future.

Many of you have been asking about the status of the matured Prudential (Jordan) policies. There is no decision as yet. This is not an unusual delay on a complex issue. I have been encouraging both sides to sit down and try to resolve the matter. When the Court renders a decision the loser will surely appeal. I'm involved in the Liberte Capital case in the Northern District of Ohio. In that case a small group of investors appealed from a decision on the method of distribution. The issue has some similarities to the Jordan matter. That appeal has been going on for two and one half years. When the decision is rendered that may not end it. There are the possibilities of further appeal or remand to the Trial Court for more proceedings, which would then be subject to appeal.

I will continue efforts at negotiation up until the decision is issued.  When that happens, I believe it will be too late to settle this issue anytime soon.

 Andrew Storar, Examiner

4/8/2005:

The Examiner has submitted an application for payment of fees in the amount of $18,942.50 and costs in the amount of $2,930.48. These fees and costs concern the period of November, 2004 through February, 2005.

During this period, the Examiner consulted with counsel for the Receiver on a number of occasions; had extensive communications with investors via telephone, letter and e-mail; continued to review correspondence and pleadings related to the subject case; conducted research, attended a show cause hearing and prepared and filed various pleadings relative to the Ernest Bustos matter; reviewed, organized and filed objections related to the Receiver's Motion to pool the two matured Prudential policies (the "Jordan policies"); attended a hearing relative to Motion to pool the Jordan policies; continued to work on matters related to Sterling Trust; attended the deposition of Edmund Pearson and reviewed the criminal indictment of Pearson; and posted updates on the Receiver's web site.

The costs are primarily related to travel expenses related to Sterling Trust, professional fees incurred by the Examiner for service of process and court reporters, computer research related to litigation and postage expense incurred in providing copies of objections regarding pooling the matured Jordan policies to investors.

To view the application for payment of fees, please see Court Orders & Filings.

3/10/2005:

As many of you know, David Svete was convicted on all counts and ordered to forfeit up to $21 million last week. The U.S. Attorney will undertake forfeiture efforts along with the receiver's counsel. Svete's sentencing is set for May 26th. You will likely receive a letter from the U.S. Attorney advising you of your right to be heard.

The Judge held a status hearing on March 9. Discussion centered on the need for a replacement for the credit facility and the possibility of selling a policy to generate funds for premium payments as well as expenses.

The Receiver is pursuing a $100,000 maturity but that is the only new one.

Please return your claim forms as soon as possible so all the
information can be cross checked and inputted.

Andrew Storar, Examiner

1/26/2005:

Investors: The Court held a hearing on Jan. 25. The subjects covered the Receiver's motion regarding a change in the credit facility (recall until policies mature the portfolio can only be maintained with borrowed funds) and a motion to approve the employment of an attorney in Vancouver, British Columbia, Canada to pursue funds that previously belonged to LifeTime and appear to have been moved there.

I raised the question of the review of the viators' medical situation to determine if it is cost effective to maintain the entire portfolio. By agreement between the Judge and me, the Receiver is to submit a report in about 60 days indicating the status of the viators, based upon available information.

Also, we discussed the question of costs in general and communication. The Receiver has agreed to look into the possibility of periodic live "call ins" whereby you could dial a number and get a report as to the
status of things and perhaps pose questions to the Receiver and his staff. Information on cost is as yet unknown but will be determined and evaluated. Also, the Judge is looking into videoconferencing some hearings to reduce time and travel costs.

Andrew Storar, Examiner

1/25/2005:

Investors: 

Regarding the January 24, 2005 Hearing:

The Court held a hearing on Jan. 24 regarding the receiver's motion to clarify the status of the two policies that matured in the weeks before his appointment. Many investors appeared and those who wished to speak were heard.

At the conclusion, each side was given two weeks to file any post hearing memoranda that they wish. Thereafter the Court will decide the matter. When that occurs I will post a notice on this website. I'll also send a letter to those who were matched to those policies.

Regarding Sterling Trust:

We have had meetings with Sterling, done research and presented the issue to the Court. As a result, the Court has found that the value of the IRA's is presently undeterminable as opposed to the full value stated by LifeTime in December '03.

This should result in a substantial reduction in your annual fees and may eliminate the required minimum distributions in the coming year. As always, consult a tax professional before taking any action.

Andrew Storar, Examiner

1/21/2005:

Investors: This is a reminder that the Court will hold a hearing
regarding the two matured Prudential policies on Monday January 24. The result is important to all of you. As of now the hearing will be on the ninth floor of the Federal Bldg. at 2^nd and Wilkinson. You are invited to attend and I believe the Court will hear your comments/concerns.

Andrew Storar, Examiner

11/18/2004:

Investors: By agreement, the time to file objections to the Receiver's motion regarding the matured Prudential policies is being extended to December 14th. This will give you extra time to formulate a response. Those of you who favor the motion can send me a letter or e-mail and I will see that it is filed as well.

Andrew Storar, Examiner

11/15/2004:

Investors: We have a meeting set with Sterling Trust, the Receiver's representatives and me on Nov. 23d. We'll discuss the Sterling fee and minimum distribution issues as well as others that may come up.

Andrew Storar, Examiner

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