Life Partners Holdings, the parent company of Life Partners, Inc. has strongly denied the allegations leveled against the firm by Texas Attorney General, acting for the State Securities Board.
Texas Attorney General filed a court case against Life Partners, its chairman and president, Brian Pardo, and its general counsel Scott Peden accusing the firm for the misrepresentations in the sale of the life settlements, such as about the life expectancies of the insureds.
The suit has sought a temporary restrictive order and appointment of receiver based generally on allegations that Life Partners’ life settlements are securities under Texas law.
Responding to the allegation, Life Partners’ chairman Brian Pardo said the company denies 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 said.
"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. 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 in the US is engaged in the secondary market for life insurance, commonly called "life settlements."