Insurer of sick running out of funds
A Burlington company that arranged investments in the life insurance policies of sick and elderly Americans is running out of cash.
Christopher Halas, vice-president of Universal Settlements International Inc., has disclosed the company cannot afford to pay premiums on $50 million of the $187 million worth of policies it holds for investors beyond Jan. 11, 2009.
He writes in an affidavit filed in court there will be no money to pay premiums on $13 million worth of policies in February, $10.3 million in March and $3.7 million in April.
"The policies will simply lapse, and the purchasers’ life settlement investments relating to the policies will become worthless," if a solution is not found, he warns.
He blames financial difficulties on the bankruptcy of an Italian bonding company and a misappropriation of funds.
A judge of the Ontario Superior Court of Justice has granted the company temporary relief from paying creditors and defending against lawsuits filed by investors under the terms of the Companies’ Creditors Arrangement Act online payday loan.
Another court hearing is scheduled to be held on Dec. 18.
Investor Rino Bifolchi filed a lawsuit in September seeking $100 million in general damages on behalf of himself and on behalf of other investors in Universal Settlements.
He claimed he has been owed $91,500 plus interest since February.
Ernst & Young will act as court monitor while the company tries to raise money by suing former owners and selling some of the policies held for Canadian investors. The Ontario Securities Commission had ordered Universal Settlements in 2006 to deal only with existing customers until it registers to sell securities.
The OSC had ordered New Life Capital Corp. and related companies to stop trading in similar investments earlier this year.
Filed under: business by Fred