Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 1 of 19

Transcription

1 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 1 of 19 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION IN RE: LIFE PARTNERS HOLDINGS, INC., et. al. Debtors. CASE NO RFN-11 JOINTLY ADMINISTERED CHAPTER 11 SUMMARY OF SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC, AS ACTUARY TO CHAPTER 11 TRUSTEE, H. THOMAS MORAN II, AND THE SUBSIDIARY DEBTORS, FOR PROFESSIONAL SERVICES RENDERED AND ACTUAL AND NECESSARY EXPENSES INCURRED FROM FEBRUARY 1, 2016 THROUGH MAY 31, 2016 Predictive Resources, LLC ( Predictive ), as actuary to Chapter 11 Trustee, H. Thomas Moran II, and the Subsidiary Debtors, submits this summary of fees and expenses sought as actual, reasonable, and necessary, in the fee application to which this summary is attached (the Fee Application ) for the period from February 1, 2016 through May 31, 2016 (the Application Period ). Predictive submits this Fee Application as an interim application in accordance with the: (i) Order Approving Procedures for Monthly and Interim Compensation and Reimbursement of Expenses for Case Professionals [Dkt. No. 733], (ii) Order Granting Motion for Entry of Order on Stipulation as to Revision to Certain Provisions of the Professional Compensation Procedures [Dkt No. 1157], and (iii) Order Granting Motion for Entry of Order Approving Second Stipulation as to Revision to Certain Provisions of the Professional Compensation Procedures [Dkt. No. 1622] (collectively, the Fee Procedures Orders ). Name of Applicant Predictive Resources, LLC Applicant s Role in Case Actuary Retention Date September 22, 2015 Date of Order Approving November 19, 2015 Retention Time Period Covered by this Application February 1, 2016 through May 31, 2016 Total Compensation Sought for $194, the Application Period. Total Professional Hours for the hours Application Period Average Hourly Rate for the $ Application Period SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC SUMMARY COVER SHEET Page

2 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 2 of 19 Total Reimbursable Expenses for the Application Period Total Compensation & Reimbursement Requested for the Application Period Total Compensation Previously Requested Total Expenses Previously Requested Total Compensation and Expenses Previously Awarded bv the Court Total Compensation & Expenses Paid Prior to this Application $ 1, s196,57 t.93 $241, $9, $250, s3t4^6ffi.2a Dated: July 19, 2016 Respectfully submitted, Vincent J. Granieri Vincent J. ACTUARY FOR TRUSTBE AND THE SUBSIDIARY DEBTORS SBcoNn INTnRru FnB AppT.ICATIoN ot,prnitctive Resouncrs, LLC SulrtrlRy Covnn Ssnnr s.2 Pacr 2

3 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 3 of 19 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION IN RE: LIFE PARTNERS HOLDINGS, INC., et. al. Debtors. CASE NO RFN-11 JOINTLY ADMINISTERED CHAPTER 11 SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC, AS ACTUARY TO CHAPTER 11 TRUSTEE, H. THOMAS MORAN II, AND THE SUBSIDIARY DEBTORS, FOR PROFESSIONAL SERVICES RENDERED AND ACTUAL AND NECESSARY EXPENSES INCURRED FROM FEBRUARY 1, 2016 THROUGH MAY 31, 2016 PURSUANT TO THE ORDER APPROVING PROCEDURES FOR MONTHLY AND INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES FOR CASE PROFESSIONAL [DKT. NO. 733] ANY OBJECTION TO THIS APPLICATION MUST BE FILED AND SERVED SO TO BE ACTUALLY RECEIVED ON OR BEFORE AUGUST 3, IF NO OBJECTION IS RECEIVED BY THE OBJECTION DEADLINE, THE COURT MAY APPROVE THE APPLICATION WITHOUT THE NEED FOR A HEARING. TO THE HONORABLE UNITED STATES BANKRUPTCY JUDGE: H. Thomas Moran II (the Trustee ), as chapter 11 trustee for Life Partners Holdings, Inc. ( LPHI ), 1 and as the sole director of Life Partners, Inc. ( LPI ) and LPI Financial Services, Inc. ( LPIFS, and together with LPI, the Subsidiary Debtors, and together with LPHI, the Debtors or Life Partners ), 2 engaged Predictive Resources, LLC ( Predictive ) as Actuary to the Trustee and the Subsidiary Debtors. By order entered November 19, 2015, this Court approved the retention of Predictive as actuary to the Trustee and the Subsidiary Debtors (the 1 Case No RFN The Trustee is serving as the sole director of LPI and LPIFS pursuant to the Trustee s authority under this Court s Order Authorizing the Trustee to Amend the Governing Documents and To File Voluntary Chapter 11 Petitions For Debtor s Subsidiaries (the Subsidiary Filing Order ) [Dkt. No. 261]. SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

4 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 4 of 19 Retention Order ). 3 On August 6, 2015, the Court approved certain procedures for interim compensation and reimbursement of expenses of case professionals. 4 The Fee Procedures Orders authorize the Trustee and the Subsidiary Debtors to compensate Predictive pursuant to the interim procedures set forth therein, and authorize the filing of periodic reports of fees earned and expenses incurred. This is the second interim fee application of Predictive as actuary to the Trustee and the Subsidiary Debtors for professional services rendered and actual and necessary expenses incurred from February 1, 2016 through May 31, 2016 (the Application ). This Application is made pursuant to 327 of title 11 of the United States, 11 U.S.C. 101, et seq. (the Bankruptcy Code ), Rule 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rule 2016 of the Local Rules of the United States Bankruptcy Court for the Northern District of Texas (the Bankruptcy Local Rules ). This Application covers fees for Predictive s services as actuary to the Trustee and the Subsidiary Debtors in the amount of $194,818.00, and expenses in the amount of $1, that have accrued over the period beginning February 1, 2016 through May 31, 2016 (the Application Period ). In support of this Application, Predictive respectfully states and represents as follows: JURISDICTION AND VENUE 1. This Court has subject matter jurisdiction over this Application pursuant to 28 U.S.C This matter is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A) and (B). 3 Dkt. No Dkt. No The court approved procedures, as modified by the (i) Order Granting Motion for Entry of Order on Stipulation as to Revision to Certain Provisions of the Professional Compensation Procedures [Dkt No. 1157], and (ii) Order Granting Motion for Entry of Order Approving Second Stipulation as to Revision to Certain Provisions of the Professional Compensation Procedures [Dkt. No. 1622] are collectively referred to herein as the Fee Procedures Orders. SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

5 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 5 of The statutory predicates for granting the relief sought herein are 11 U.S.C. 328, 330 and 331, as complemented by Rule 2016(a) of the Federal Rules of Bankruptcy Procedure and the Local Rules of this Court. PROCEDURAL BACKGROUND 4. On January 20, 2015 (the LPHI Petition Date ), LPHI filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code thereby commencing its bankruptcy case (the LPHI Bankruptcy Case ). 5. On March 10, 2015, the Court granted a request to appoint a chapter 11 trustee. 5 On March 13, 2015, the U.S. Trustee appointed the Trustee as the chapter 11 trustee in the LPHI Bankruptcy Case, 6 and on March 19, 2015, this Court affirmed the Trustee s appointment On May 19, 2015 (the Subsidiary Petition Date ), the Subsidiary Debtors filed their respective voluntary petitions for relief under chapter 11 of the Bankruptcy Code, thereby initiating their bankruptcy cases (the Subsidiary Bankruptcy Cases ). The LPHI Bankruptcy Case and the Subsidiary Bankruptcy Cases (collectively, these Cases ) are being jointly administered On August 6, 2015, the Court entered the Order Approving Procedures for Monthly and Interim Compensation and Reimbursement of Expenses for Case Professionals setting forth the monthly and interim procedures for compensation and reimbursement of expenses for professionals employed in these Cases On October 30, 2015, the Court entered the Order Granting Motion for Entry of Order on Stipulation as to Revision to Certain Provisions of the Professional Compensation 5 Dkt. No Dkt. No Dkt No. 225; Dkt. No Dkt. No Dkt. No SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

6 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 6 of 19 Procedures Order ( First Stipulation Order ) thereby approving of modification of the interim compensation procedures pursuant to a joint stipulation among the Trustee, the Official Committee of Unsecured Creditors (the Committee ), and the United States Trustee. 10 On March 14, 2016, the Court entered the Order Granting Motion for Entry of Order Approving Second Stipulation as to Revision to Certain Provisions of the Professional Compensation Procedures (the Second Stipulation Order ) On October 23, 2015, the Court entered the Final Order Authorizing Use of Funds, Adequate Protection Provisions, and Related Relief ( the Final Financing Order ) On November 28, 2015, the Trustee, the Subsidiary Debtors, and the Official Committee of Unsecured Creditors appointed in these Cases (the Committee, and collectively with the Trustee and the Subsidiary Debtors, the Plan Proponents ), filed their Joint Plan of Reorganization, and their Disclosure Statement for the Joint Plan of Reorganization. On January 19, 2016, the Plan Proponents filed their Amended Joint Plan of Reorganization, and their Disclosure Statement for the Amended Joint Plan of Reorganization. On March 24, 2016, the Plan Proponents filed their Second Amended Joint Plan of Reorganization and their Disclosure Statement for the Second Amended Joint Plan of Reorganization. 11. On May 2, 2016, the Plan Proponents filed the their Amended Disclosure Statement for the Second Amended Joint Plan of Reorganization. On May 5, 2016, the Court entered the Disclosure Statement Order, finding that the Disclosure Statement contains adequate for purposes of Bankruptcy Code section Following significant arms -length negotiations, on June 16, 2016, the Plan Proponents and Vida reached the Agreement whereby Vida would, among other things, provide 10 Dkt. No Dkt. No Dkt. No SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

7 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 7 of 19 post-effective Date financing to the Position Holder Trust (as defined in the Joint Plan) and purchase servicing rights from LPI for $5 million. 13. On June 22, 2016, the Plan Proponents filed their Third Amended Joint Plan Of Reorganization (as amended, modified and/or supplemented, the Joint Plan ) and their Disclosure Statement for the Third Amended Joint Plan Of Reorganization (as amended, modified and/or supplemented, the Disclosure Statement ) 13 incorporating the terms of the agreement with Vida. On June 24, 2016, the Court approved the Disclosure Statement as well as the timetable for solicitation of the Joint Plan, and on June 29, 2015, the Court entered an order approving the same A confirmation hearing for the Joint Plan is scheduled for August 29, PREDICTIVE S RETENTION 15. On October 20, 2015, the Trustee and Subsidiary Debtors filed an application seeking to retain Predictive (the Predictive Employment Application ). 15 On November 19, 2015, the Court entered the Retention Order, authorizing the retention of Predictive as actuary to the Trustee and Subsidiary Debtors, effective September 22, The Retention Order authorizes the Trustee and Subsidiary Debtors to compensate and reimburse Predictive in accordance with the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and the Fee Procedures Orders. The Retention Order also authorizes the Trustee and Subsidiary Debtors to compensate Predictive at the hourly rates set forth in the Predictive Employment Application and to reimburse Predictive for its actual and necessary out-of-pocket expenses 13 The Disclosure Statement contains additional background regarding these Cases, which is incorporated herein for all purposes. All capitalized terms not expressly defined herein shall have the same meaning as ascribed in the Disclosure Statement. 14 Dkt. No Dkt. No Dkt. No SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

8 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 8 of 19 incurred, subject to Court approval. The particular terms of Predictive s engagement are detailed in the engagement letter by and between Predictive and the Trustee and the Subsidiary Debtors Pursuant to the Retention Order, and Predictive s engagement letter, Predictive s scope of actuarial services to the Trustee and the Subsidiary Debtors included: a. act as an actuarial consultant in connection with the Debtors life insurance policy portfolio, any associated LE estimates, and the longevity of insureds; b. provide valuation services and financial forecasting regarding the anticipated performance of the Debtors life insurance policy portfolio going forward by: i. Reviewing premium payment schedules to determine the accuracy of the contained therein; ii. iii. reviewing death benefit schedules to determine the accuracy of the contained therein; and determining appropriate future mortality rates for each of the insureds; c. Estimate future premium payments and mortality curves associated with the life settlement policies contained in LPI s life settlement portfolio; d. Develop the model(s) necessary to project future cash flows for LPI s life settlement portfolio, and produce summary and/or detailed reports in electronic format that allow the Trustee and the Subsidiary Debtors easier access to the records; d. assist in the preparation and implementation of a plan of reorganization or otherwise to serve as a basis for discussion with prospective strategic partners; e. assist in structuring and negotiating the financial aspects of any proposed transaction; and f. Provide litigation support and coordinate with other professionals employed by the Trustee and the Subsidiary Debtors on issues relating to (i) any and all claims related to the sale of fractional interests in life insurance policies; (ii) any and all claims related to fees charged in connection with the sale of fractional interests in life insurance policies; (iii) any and all issues related to valuation in modeling related to claims brought by Trustee or the Subsidiary Debtors against third parties; (iv) any and all issues related to standard industry practice regarding fractional 17 A true and correct copy of the engagement letter was attached to the Predictive Employment Application. See Dkt. No at Exhibit B. SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

9 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 9 of 19 interests and life insurance policies and accounting related to same; and (v) the ownership of the life settlement policies. 17. The compensation arrangement for Predictive, includes the following terms: a. The hourly rates of Predictive employees expected to perform the Actuarial Services hereunder are as follows: EMPLOYEE/SERVICE Vincent J. Granieri $ Gregory P. Heck $ Ryan N. Nelsestuen $ Contract $ Underwriting Services Contract Analytical $ Services Contract $90.00 Administrative Services HOURLY RATE b. Out of town travel time will be paid at half of the normal hourly rate. In addition, Predictive will seek reimbursement of its reasonable out-of-pocket expenses incurred in connection with this engagement. c. All fees and expenses will be billed on a monthly basis, subject to the Fee Procedures Orders. PREDICTIVE S FIRST INTERIM FEE APPLICATION 18. Prior to filing this Fee Application, Preedictive filed its First Interim Fee Application. The First Interim Fee Application covered fees and expenses incurred by Predictive from September 22, 2015 through January 31, 2016 (the First Interim Period ). In the First Interim Fee Application Predictive sought approval of compensation for all fees and expenses for the First Interim Period in the aggregate amount of $250,917.52, representing $241, in fees, and $9, in reimbursement of out-of-pocket expenses. SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

10 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 10 of 19 PREDICTIVE S SECOND INTERIM FEE APPLICATION 19. Pursuant to the Fee Procedures Order, Predictive submitted monthly fee statements for the months of February, March, April, and May No objection was filed to Predictive s monthly fee statements for February, March, April and May As of the date of the filing of this Fee Application, Predictive has received payment of 50% of fees and 100% of expenses in advance of a hearing on this Application for February through May 31, Pursuant to the Fee Procedures Orders, the summary of fees, expenses, and payments noted above are as follows: Invoice Period Hours Fees Expenses Total Payments Holdback February $81, $1, $83, $67, $16, March $55, $0.00 $55, $27, $27, April $31, $30.00 $31, $15, $15, May $26, $0.00 $26, $13, $13, Totals $194, $1, $196, $123, $72, An itemization of hours and fees for actuary services during the Application Period, is attached hereto as Exhibit A. Also included in Exhibit A is an itemization of actual and necessary expenses incurred during the Application Period. 23. Attached as Exhibit B is a breakdown of the hours worked by each professional included in this Application. The average hourly billing rate, excluding travel, is $ per hour. A further explanation of time spent and services provided is set forth below and in the attached exhibits. 18 See Dkt. Nos. 1677, 2016, 2368, and See Dkt. Nos. 1807, 2077, 2509 and SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

11 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 11 of Predictive has not entered into any agreement, express or implied, with any other party for the purpose of fixing or sharing fees or other compensation to be paid for professional services rendered in these Cases. 25. No promises have been received by Predictive as to compensation in connection with these cases other than in accordance with the provisions of the Bankruptcy Code. NATURE OF SERVICES AND PROJECT BILLING SUMMARIES 26. During the Application Period, Predictive performed the duties and obligations set forth in the Application and Retention Order, including but not limited to the following tasks: (a) building and reviewing deterministic models for purposes of forecasting performance of Debtors policy portfolio; (b) assisting in providing data for contested matters; and (c) working closely with other case professionals on issues related to the Plan and the Disclosure Statement. 27. More specifically, Predictive rendered professional services as reflected in the attached exhibits and as described below: a. Asset Analysis and hours; $142, Predictive personnel conducted extensive research into longevity estimated for several groups of insureds, underwriting the life expectancy. Predictive also undertook analysis related to life expectancies for particular policies, including life expectancy underwriting. b. Case Administration 4.0 hours; $ Predictive personnel assisted the Trustee and Subsidiary Debtors other professionals and attended hearing for the disclosure statement. c. Meetings/Communications with Creditors 38.3 hours; $10, Predictive personnel conferred extensively with the Committee s actuary and reconciled model results with creditor s models. In addition, Predictive personnel developed forecast for the Joint Plan and Disclosure Statement. d. Fee/Employment Applications 5.5 hour; $ Predictive personnel prepared and reviewed the First Interim Fee Application. SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

12 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 12 of 19 e. Plan & Disclosure Statement: 46.4 hours; $13, Predictive personnel reviewed the Plan and Disclosure Statement and objections to the Plan. Predictive personnel also provided several forecast data and plan models for key plan assumptions, and analyzing Transparency and Vida plans. f. Valuations: hours; $23, Predictive developed, designed, and reviewed portfolio models to study and access data for assumptions on several categories of policies within the policy portfolio. Predictive personnel also assisted the Trustee, the Subsidiary Debtors, and their professionals with data analysis in connection with the Plan and the Disclosure Statement. g. Non-Working Travel 11.8 hours; $1, Predictive personnel and staff traveled back and forth to Waco and Dallas from Cincinnati on several occasions as necessary. 28. Predictive submits that the foregoing services were necessary to fulfill the duties and obligations as actuary to the Trustee and the Subsidiary Debtors. Predictive s services were necessary and beneficial to the Debtors estates at the time these services were rendered, and they were necessary and beneficial to the Trustee in the performance of his duties. Predictive further submits that its services were performed without unnecessary duplication of effort or expense. Predictive expended time for the foregoing services commensurate with the complexity, importance, and nature of the issues and tasks involved. PREDICTIVE S REQUESTED COMPENSATION AND REIMBURSEMENT SHOULD BE ALLOWED 29. Section 331 of the Bankruptcy Code provides for the allowance of interim compensation for professional services rendered and reimbursement of expenses in bankruptcy cases as follows: [A]ny professional person... may apply to the court not more than once every 120 days after an order for relief in a case under this title, or more often if the court permits, for such compensation for services rendered... as is provided under section 330 of this title. SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

13 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 13 of U.S.C Further, with respect to the amount of compensation, section 330(a)(1) of the Bankruptcy Code provides, in pertinent part, that the Court may award to a professional person: reasonable compensation for actual, necessary services rendered. 11 U.S.C. 330(a)(1)(A). 30. In determining the amount of reasonable compensation to be awarded, Bankruptcy Code section 330(a)(3)(A) provides that the Court shall consider the nature, the extent, and the value of the services rendered by the professional, while taking into account all relevant factors, including the following: a. The time spent on such services; b. The rates charged for such services; c. Whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of the chapter 11 case; d. Whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issues or task addressed; and e. Whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than chapter 11 cases. 11 U.S.C. 330(a)(3)(A). See also In re Busy Beaver Bldg. Ctrs., Inc., 19 F.3d 833, 850 (3d Cir. 1994) (noting Bankruptcy Code s policy of providing adequate compensation and stating that Congress rather clearly intended to provide sufficient economic incentive to lure competent bankruptcy specialists to practice in the bankruptcy courts ) (citation and internal quotation marks omitted). 31. When interpreting these authorities to determine an award of compensation, most courts have adopted the standards enumerated in Am. Benefit Life Ins. Co. v. Baddock (In re First Colonial Corp. of Am.), 544 F.2d 1291, (5th Cir. 1977), cert. denied, 431 U.S Predictive respectfully submits that, as demonstrated below, the application of these factors (the SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

14 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 14 of 19 First Colonial Factors ) to the services performed by Predictive on behalf of the Trustee and the Subsidiary Debtors should result in this Court s allowance of the full compensation sought. APPLICATION OF THE FIRST COLONIAL FACTORS 32. The Time and Labor Required. The professional services rendered by Predictive on behalf of the Trustee and the Subsidiary Debtors required the continuous expenditure of substantial time and effort, under time pressures which sometimes required the performance of services late into the evening and, on some occasions, over weekends. The exhibits to this Application comprehensively outline hourly billing rates, a description of the services rendered, and the number of hours spent and fees billed during the Application Period. 33. The Novelty and Difficulty of Questions. Novel and complex issues have arisen in the course of these Cases. These include matters relating to evaluating risk assessment system performance and providing life expectancy estimates, predictive modeling services, and longevity analysis. In these Cases, as in many others in which Predictive has been involved, Predictive assisted in the resolution of these complex issues for the benefit of the Trustee, the Debtors, and the Debtors estates, and to maximize recoveries for all creditors. 34. The Skill Requisite to Perform the Actuary Services Properly. Predictive believes its actuarial expertise in the area of life settlements, and its approach to problem solving and resolution of issues, contributed to the protection of the Debtors interests, assets and maximization of the estates for the benefit of creditors, and to favorable resolution of complex issues for various stakeholders. 35. The Preclusion of Other Employment by Applicant Due to Acceptance of the Case. The number of matters needing attention on a continuous basis required Predictive to commit significant portions of its time to these Cases, which limited its ability to accept other cases or develop new business. SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

15 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 15 of The Customary Fee. The compensation sought herein is based upon Predictive s normal hourly rates for services of this kind. Predictive respectfully submits that the compensation sought herein is not unusual given the magnitude and complexity of these Cases and the time dedicated to the representation of the Trustee and the Subsidiary Debtors. Such compensation is commensurate with fees Predictive has been awarded in other cases, and generally is lower than the hourly rates charged by other professionals of comparable experience. 37. Whether the Fee is Fixed or Contingent. Predictive charges customary hourly rates for time spent in representing the Debtors and Predictive s fee is not outcome dependent. Pursuant to sections 330 and 331 of the Bankruptcy Code, all fees sought by professionals retained under section 327 or 1103 of the Bankruptcy Code are contingent pending final approval by the Court, and are subject to adjustment by the Court depending upon the services rendered and the results obtained. 38. Time Limitation Imposed by Client or Other Circumstances. Predictive has been required to attend to various issues as they have arisen. Occasionally, Predictive s personnel have had to perform those services under significant time constraints requiring professionals assigned to this case to work extended hours. All work performed by Predictive was at the request or direction of the Trustee, the Debtors, Debtors counsel, related to reporting required by the US Trustee, or in keeping with Predictive s ethical responsibilities. 39. The Amount Involved and Results Obtained. Predictive significantly participated in assisting the Debtors, Trustee and case professionals with creating models and methodologies for the valuation of several policies and reconciling valuations with the creditors valuation; reviewing and revising the LPI Disclosure statement and various needed by the SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

16 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 16 of 19 Trustee and Subsidiary Debtors professionals and stakeholders to make informed decisions throughout pendency of these Cases. 40. The Experience, Reputation and Ability of Predictive Resources, LLC. Predictive s experience enabled it to perform the services described herein competently and expeditiously. Predictive maintains a reputation for experience, skill, quality, integrity and ability. Predictive s professionals have over twenty-five years of actuarial experience in the life settlement and viatical settlement markets. Predictive s team also has extensive experience evaluating risk assessment system performance and providing life expectancy estimates, predictive modeling services, and longevity analysis. Predictive s experience also includes retention as an independent consultant and it s professionals have provided expert witness services in litigation involving life settlement and longevity analyses. 41. The Undesirability of the Case. As noted by the Court on several occasions, these Cases present many complex and difficult issues. Addressing these issues required a significant commitment of time from Predictive s professionals and impacts Predictive s ability to take other cases or participate in business development and professional activities. 42. Nature and Length of Professional Relationship. Predictive was retained in this case September 22, 2015 pursuant to an Order of this Court dated November 19, Predictive rendered services continuously to the Trustee and the Subsidiary Debtors since its retention as has been necessary and appropriate. ACTUAL AND NECESSARY EXPENSES 43. A detailed description of the actual and necessary expenses incurred by Predictive in connection with its employment with the Trustee and the Subsidiary Debtors during the Application Period is set forth herein and in Exhibit A. As set forth on Exhibit A, Predictive SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

17 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 17 of 19 seeks reimbursement of actual and necessary expenses incurred during the Application Period in the aggregate amount of $1,753.93, as summarized below: Ground Transportation $ Hotel $ Meals Expense $ Mileage $29.16 Parking $45.00 Miscellaneous $36.00 Transportation (Including airfare) $ Additional expenses for postage, copying, and other administrative charges, have not been charged to the estates. PRAYER WHEREFORE, Predictive respectfully requests the Court to enter an order granting: (i) interim approval of all fees and expenses in the aggregate amount of $196,571.93, representing $194, in fees incurred during the case, and reimbursement of out-of-pocket expenses in the amount of $1,753.93; (ii) payment of the holdback in the amount of $72,886.25, or such increased amount if prior fees and expenses remain outstanding; (iii) grant Predictive such other and further relief to which it may be justly entitled. Dated: July 19, 2016 Respectfully submitted, SECOND INTERIM FEE APPLICATION OF PREDICTIVE RESOURCES, LLC PAGE

18 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 18 of 19 Vincent J. Granieri incent J. Grhniert ACTUARY FOR THE TRUSTEE AND THE SUBSIDIARY DEBTORS sncolqn lnrrnrnr Fnn ApplrcATroN op pnnucrrve Rnsouncns. LLC t055.2 Pncs 16

19 Case rfn11 Doc 2727 Filed 07/19/16 Entered 07/19/16 19:10:20 Page 19 of 19 elrrlrrccls of ser q I, the undersigned, do hereby certify that on Juiy 19, 2016 I directed a copy of the foregoing application to be served electronically through ECF on the U.S. Trustee, the LPHI Committee, the Trustee, the Debtors, and other parties in interest in these Cases. I also caused Epiq Bankruptcy Solutions, LLC, as service agent, to be directed to serve a notice of the fee application and hearing on the Notices Parlies and the Consolidated Master Limited Service List, via ECF, , or certified mail, where appropriate. - Vincent J. ranlert ol*--s cerri[',rcate Or'.=C OMPLIANCE I certify that I have read the application, and to the best of my knowledge, and belief, formed after reasonable inquiry, the compensation and expense reimbursement sought is in conformity with the Court's Guidelines for Compensation and Expense Reimbursement of Professionals. I certify that the eompensation and expense reimbursement requested are billed at rates, in ascordance with practices, no less favorable than those customarily employed by the Firm and generally accepted by the Firm's clients. incent J. nrerr ; SnCOrl{n Txrnnnr FBn AppIICATIoN ot.prboictive RnsouRcos. LLC t] 7910s5.2 PAGE I7

20 Case rfn11 Doc Filed 07/19/16 Entered 07/19/16 19:10:20 Page 1 of 26 EXHIBIT A Invoices

21 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 2 of 26 Timesheet for Life Partners Project For the month of February, 2016 Date Name Task Notes Hours Rate Fees 2/1/2016 Granieri Meetings with Creditors Review Creditor Committee's communication and make edits /1/2016 Granieri Valuation Work on ASOP #42 professional actuarial disclosure statement /1/2016 Granieri Meetings with Reconciling model inputs and results for the Creditor's actuary Creditors 2/2/2016 Granieri Meetings with Analysis of model cash flows, partial portfolio results and Creditors' Creditors actuary's models. 2/3/2016 Granieri Meetings with Reconciling model inputs, cash flows and results for the Creditor's Creditors actuary. 2/3/2016 Granieri Asset Analysis & Researching issues for longevity update using prior LE , /4/2016 Granieri Asset Analysis & Researching HIV issues for longevity update using prior LE /4/2016 Granieri Meetings with Reconciling model results for the Creditor's actuary Creditors 2/5/2016 Granieri Meetings with Reconciling model results for the Creditor's actuary Creditors 2/5/2016 Granieri Asset Analysis & Researching HIV issues for longevity update using prior LE /7/2016 Granieri Meetings with Reconciling model results for the Creditor's actuary Creditors 2/7/2016 Granieri Asset Analysis & Researching HIV issues for longevity update using prior LE /8/2016 Granieri Asset Analysis & Researching HIV issues for longevity update using prior LE /8/2016 Granieri Meetings with Reconciling model results for the Creditor's actuary Creditors 2/8/2016 Granieri Asset Analysis & Life expectancy evaluations Page 1

22 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 3 of 26 Timesheet for Life Partners Project Date Name Task Notes Hours Rate Fees 2/8/2016 Granieri Meetings with Review Objections to Proposed Reorganization Plan Creditors 2/9/2016 Granieri Meetings with Prepare testimony and respond to discovery requests Creditors 2/9/2016 Granieri Asset Analysis & Researching HIV issues for longevity update using prior LE /10/2016 Granieri Asset Analysis & Refine methods for longevity update using prior LE /10/2016 Granieri Meetings with Prepare testimony for disclosure statement hearing , Creditors 2/11/2016 Granieri Case Prepare testimony for disclosure statement hearing, including Administration meeting with Ragan and Gish. 2/11/2016 Granieri Case Attend hearing and continuation for disclosure statement Administration 2/11/2016 Granieri Meetings with Meeting with Creditor counsel Creditors 2/12/2016 Granieri Asset Analysis & , /13/2016 Granieri Asset Analysis & , /14/2016 Granieri Valuation Work on LPI disclosure statement regarding life expectancies /14/2016 Granieri Asset Analysis & /15/2016 Granieri Asset Analysis & , /15/2016 Granieri Meetings with Develop forecast for Proposed Reorganization Plan Creditors 2/16/2016 Granieri Meetings with Respond to request for Creditors 2/16/2016 Granieri Asset Analysis & , Page 2

23 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 4 of 26 Timesheet for Life Partners Project Date Name Task Notes Hours Rate Fees 2/17/2016 Granieri Asset Analysis & , /18/2016 Granieri Asset Analysis & , /19/2016 Granieri Asset Analysis & , /20/2016 Granieri Asset Analysis & Researching HIV issues for longevity update using prior LE /22/2016 Granieri Meetings with Respond to request for data Creditors 2/23/2016 Granieri Asset Analysis & , /24/2016 Granieri Asset Analysis & , /25/2016 Granieri Asset Analysis & , /25/2016 Granieri Valuation Set up stochastic model run /26/2016 Granieri Meetings with Respond to request for data Creditors 2/27/2016 Granieri Asset Analysis & , /28/2016 Granieri Asset Analysis & , /29/2016 Granieri Asset Analysis & , /29/2016 Granieri Meetings with Develop forecast for Proposed Reorganization Plan Creditors Granieri Total , /2/2016 Heck Meetings with Creditors Model work on LPI policy portfolio. Run stochastic model with creditors' assumptions Page 3

24 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 5 of 26 Timesheet for Life Partners Project Date Name Task Notes Hours Rate Fees 2/3/2016 Heck Asset Analysis & Validating longevity update using prior LE logic /3/2016 Heck Asset Analysis & Researching HIV issues for longevity update using prior LE /6/2016 Heck Valuation Model work on LPI policy portfolio. Expanding capabilities of the , stochastic model. 2/6/2016 Heck Valuation Model work on LPI policy portfolio. Testing the new stochastic model. 2/6/2016 Heck Valuation Model work on LPI policy portfolio. Running the expanded stochastic model. 2/26/2016 Heck Valuation Model work on LPI policy portfolio. Building and running the latest , stochastic model. Heck Total , /1/2016 Nelsestuen Asset Analysis & Programming longevity update using prior LE logic /1/2016 Nelsestuen Meetings with Reconciling model inputs and results Creditor's actuary Creditors 2/2/2016 Nelsestuen Meetings with Reconciling model inputs and results Creditor's actuary Creditors 2/2/2016 Nelsestuen Asset Analysis & Programming longevity update using prior LE logic /3/2016 Nelsestuen Asset Analysis & Programming longevity update using prior LE logic /3/2016 Nelsestuen Asset Analysis & Testing longevity update using prior LE logic /9/2016 Nelsestuen Valuation Model work on LPI policy portfolio. Building deterministic model /10/2016 Nelsestuen Asset Analysis & Analyzing and designing report to illustrate life expectancy of insureds where there is no LE or LUUP available Page 4

25 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 6 of 26 Timesheet for Life Partners Project Date Name Task Notes Hours Rate Fees 2/10/2016 Nelsestuen Asset Analysis & Programming report to illustrate life expectancy of insureds where , there is no LE or LUUP available. 2/11/2016 Nelsestuen Asset Analysis & Programming report to illustrate life expectancy of insureds where , there is no LE or LUUP available. 2/12/2016 Nelsestuen Asset Analysis & Programming report to illustrate life expectancy of insureds where there is no LE or LUUP available. 2/12/2016 Nelsestuen Asset Analysis & Testing report to illustrate life expectancy of insureds where there is , no LE or LUUP available. 2/13/2016 Nelsestuen Valuation Programming longevity update using prior LE Smoker logic /16/2016 Nelsestuen Valuation Developing Annual Premiums report for BridgePoint /17/2016 Nelsestuen Valuation Developing Premium Max Date, Extended Maturity Date report for BridgePoint. 2/19/2016 Nelsestuen Valuation Model work on LPI policy portfolio. Building deterministic model /23/2016 Nelsestuen Asset Analysis & Implementing longevity update using prior LE logic /26/2016 Nelsestuen Valuation Model work on LPI portfolio generating death benefits for model comparison. Nelsestuen Total 56 10, /3/2016 Larson Asset Analysis & Revision of LE methodology for use of prior LEs with no new medical /11/2016 Larson Asset Analysis & /11/2016 Haack Asset Analysis & /11/2016 McClean Asset Analysis & , /15/2016 Larson Asset Analysis & /15/2016 Haack Asset Analysis & , /15/2016 McClean Asset Analysis & Page 5

26 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 7 of 26 Timesheet for Life Partners Project Date Name Task Notes Hours Rate Fees 2/16/2016 Larson Asset Analysis & 2/16/2016 Haack Asset Analysis & 2/16/2016 McClean Asset Analysis & 2/17/2016 Larson Asset Analysis & 2/17/2016 Haack Asset Analysis & 2/17/2016 McClean Asset Analysis & 2/18/2016 Larson Asset Analysis & 2/18/2016 Haack Asset Analysis & 2/18/2016 McClean Asset Analysis & 2/19/2016 Larson Asset Analysis & 2/19/2016 Haack Asset Analysis & 2/19/2016 McClean Asset Analysis & 2/23/2016 Larson Asset Analysis & 2/24/2016 Haack Asset Analysis & 2/25/2016 McClean Asset Analysis & , , , , , Contract Underwriting Total , Page 6

27 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 8 of 26 Timesheet for Life Partners Project Date Name Task Notes Hours Rate Fees Total , /9/2016 Granieri Travel Cincinnati to Dallas /11/2016 Granieri Travel Dallas to Fort Worth /11/2016 Granieri Travel Fort Worth to Cincinnati Heck Travel Granieri Total , Heck Total 0 Nelsestuen Travel 0 Nelsestuen Total 0 U/W Travel 0 UW Total 0 Analytical Travel 0 Analytical Total 0 Non Working Travel Total , Grand Total , Life Partners Inc. 65, Life Partners Holdings Inc. 12, LPIFS 4, Page 7

28 Case rfn11 Doc Filed 07/19/16 Entered 07/19/16 19:10:20 Page 9 of 26 Predictive Resources, LLC Expense Report For Life Partners For the month of February, 2016 Acct ID Acct Description Trx Date Description Amount Local Travel Mileage 2/9/16 Mileage - Granieri residence to CVG Airport 27 miles Local Travel Mileage 2/11/16 Mileage - CVG Airport to Granieri residence - 27 miles Local Travel Parking 2/11/16 Airport parking LOCAL TRAVEL EXPENSE Out of Town Travel Transportation 2/9/16 Granieri Airfare TRANSPORTATION EXPENSE Out of Town Travel Ground Transportation 2/11/16 Granieri Rental Car Out of Town Travel Ground Transportation 2/11/16 Granieri Gas for Auto Rental 6.48 Out of Town Travel Ground Transportation 2/10/16 Granieri parking 4.50 GROUND TRANSPORTATION EXPENSE Out of Town Travel Hotel 2/11/16 SpringHill Suites Granieri HOTEL EXPENSE Out of Town Travel Meals Expense 2/11/16 Granieri Meals in Dallas 2/ MEALS EXPENSE Out of Town Travel Tips Ground Transportation 2/11/16 Cash tips - 2/ OTHER EXPENSE 6.00 TOTAL EXPENSE 2/1-2/29/2016 1, /23/2016 at 3:22 PM Page: 1

29 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 10 of Timesheet for Life 26Partners Project For the month of March, 2016 Date Name Task Notes Hours Rate Fees 3/2/2016 Granieri Plan & Disclosure Statement Develop forecasts for Proposed Reorganization Plan /3/2016 Granieri Valuation Perform mortality analysis using updated experience /4/2016 Granieri Valuation Perform mortality analysis using updated experience /7/2016 Granieri Valuation Perform mortality analysis using updated experience /7/2016 Granieri Employment and Prepare Interim Fee Application for Predictive Resources, LLC Fee Application 3/8/2016 Granieri Plan & Disclosure Communicating plan model assumptions and data issues Statement 3/8/2016 Granieri Plan & Disclosure Preparing Life Expectancy Variance Report format and verbiage for Statement Disclosure Statement 3/9/2016 Granieri Plan & Disclosure Preparing Life Expectancy Variance Report format and verbiage for Statement Disclosure Statement 3/11/2016 Granieri Plan & Disclosure Preparing Life Expectancy Variance Report format and verbiage for Statement Disclosure Statement 3/11/2016 Granieri Plan & Disclosure Communicating plan model assumptions and data issues Statement 3/14/2016 Granieri Plan & Disclosure Preparing Life Expectancy Variance Report format and verbiage for Statement Disclosure Statement 3/14/2016 Granieri Plan & Disclosure Communicating plan model assumptions and data issues Statement 3/15/2016 Granieri Plan & Disclosure Preparing Life Expectancy Variance Report format and verbiage for Statement Disclosure Statement 3/15/2016 Granieri Employment and Prepare Interim Fee Application for Predictive Resources, LLC Fee Application 3/16/2016 Granieri Employment and Prepare Interim Fee Application for Predictive Resources, LLC Fee Application 3/16/2016 Granieri Plan & Disclosure Statement Communicating plan model assumptions and data issues Page 1

30 Case rfn11 Doc Predictive Filed 07/19/16 Resources, Entered LLC07/19/16 19:10:20 Page 11 of Timesheet for Life 26Partners Project Date Name Task Notes Hours Rate Fees 3/17/2016 Granieri Employment and Prepare Interim Fee Application for Predictive Resources, LLC Fee Application 3/18/2016 Granieri Plan & Disclosure Preparing policy portfolio forecast for Disclosure Statement Statement 3/18/2016 Granieri Plan & Disclosure Communicating plan model assumptions and data issues Statement 3/19/2016 Granieri Plan & Disclosure Preparing policy portfolio forecast and Life Expectancy Variance Statement Analysis assumptions for Disclosure Statement 3/21/2016 Granieri Plan & Disclosure Preparing policy portfolio forecast and Life Expectancy Variance Statement Analysis assumptions for Disclosure Statement 3/22/2016 Granieri Valuation Design Stochastic Opt in model /23/2016 Granieri Valuation Design Stochastic Opt in model /24/2016 Granieri Plan & Disclosure Preparing Life Expectancy Variance Report format and verbiage for Statement Disclosure Statement 3/28/2016 Granieri Plan & Disclosure Communicating plan model assumptions and data issues Statement 3/29/2016 Granieri Plan & Disclosure Design Illustrative Comparison of Life Expectancy for Disclosure Statement Statement 3/29/2016 Granieri Employment and Prepare Interim Fee Application for Predictive Resources, LLC Fee Application 3/30/2016 Granieri Plan & Disclosure Design Illustrative Comparison of Life Expectancy for Disclosure Statement Statement 3/30/2016 Granieri Valuation Call and analysis to set up new deterministic & stochastic valuation assumptions 3/31/2016 Granieri Plan & Disclosure Design Illustrative Comparison of Life Expectancy for Disclosure Statement Statement 3/31/2016 Granieri Valuation Analysis to set up new deterministic & stochastic valuation assumptions Granieri Total , /22/2016 Heck Valuation Design Stochastic Opt in model Page 2