Following a recent shareholder meeting, Life Partners., a Waco, Texas based life settlement provider, announced it would be using over $100 million dollars worth of capital to fund a separate shareholder owned venture.
The life settlement provider says it will distribute $100 million in pre-tax settlement assets worth about $6.71 per share. These settlements have a cost basis of $1.59 per share.
“The policies after all costs and interest are worth about $100 million or $6.71 per share,” said Brian Pardo, chief executive of Life Partners. “We carry them at cost on our books which is the $1.59 per share. The market is not giving our stock credit for the true value of these assets, $100 million pre-tax. So, we decided just to spin them out to our shareholders and let them each collect their portion of the $100 million in cash.”
Shareholders will be taxed on gains from the payout. The payout allows the life settlement provider to pay out the cash as a dividend, rather than being unreflected in the share price.
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