When a financial services firm with secondary life insurance assets and economic interests in independent entities filed for Chapter 11 protection, $1.6 billion in bonds was left in the lurch, affecting over 27,000 investors. A cloud of fraudulent transactions hovered, and bondholders needed an expert outfit to isolate and restore investments. AlixPartners was brought on to advise the official bondholder committee (OBC).

At the time, one of the independent entities was unraveling its SPAC model, and the OBC needed a financial advisor with both corporate investigation and bankruptcy expertise in order to evaluate complex transactions with these entities, and navigate a difficult, multifaceted bankruptcy case.

Our team conducted a thorough investigation of complex prepetition transactions, identified causes of action, and assisted counsel in preparing a standing motion and complaint filed against the debtors and other parties by the OBC. Chiefly, we:

  • analyzed and traced uses of the L Bond proceeds and identified potential preferences and fraudulent transfers;
  • investigated and analyzed elements of a Ponzi scheme;
  • investigated valuation and solvency related issues;
  • quantified commissions paid to broker-dealers; and
  • prepared for and attended interviews and depositions

We worked to ensure favorable settlements and maximize recoveries for L bondholders and offer oversight and analysis of numerous motions and filings as the OBC negotiated provisions for unsecured creditors.

Our investigation and financial analysis uncovered numerous details about the debtors’ prepetition transactions which enabled the OBC to vigorously pursue a variety of claims. These efforts helped propel the debtors on a path to successfully exit bankruptcy to establish a wind-down trust for the company’s current operations and a litigation trust to follow up on other key claims uncovered by our investigation. Months later, the air has begun to clear.

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