EMERGENT CAPITAL, INC. (NYSE:EMG) Files An 8-K Bankruptcy or Receivership
Item 1.03Bankruptcy or Receivership.
On December 13, 2018, White Eagle Asset Portfolio, LP, Emergent Capital, Inc.’s (the “Company”) wholly-owned indirect Delaware subsidiary (“White Eagle”), filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Chapter 11 case is being administered under case number 18-12808 (the “White Eagle Chapter 11 Case”).
The commencement of the White Eagle Chapter 11 Case would constitute a default and event of default under the terms of the Amended and Restated Indenture between the Company and Wilmington Trust, National Association, as indenture trustee (the “Senior Note Indenture”) relating to the Company’s 8.5% Senior Secured Notes due 2021 (the “Senior Notes”) and the Indenture between the Company and U.S. Bank, National Association, as indenture trustee (the “Convertible Note Indenture”) relating to the Company’s 5.0% Senior Unsecured Convertible Notes due 2023 (the “Convertible Notes”). However, such defaults and events of default and their consequences were waived in advance of the White Eagle Chapter 11 Case by holders of all of the outstanding principal amount of the outstanding Senior Notes and by holders of a majority of the outstanding principal amount of the outstanding Convertible Notes, and consequently, the Company believes that no defaults, events of default or acceleration of the payment obligations thereunder, including principal or accrued interest, occurred under either the Senior Note Indenture or the Convertible Note Indenture.
The commencement of the White Eagle Chapter 11 Case, together with the related filings of Chapter 11 cases for Lamington Road Designated Activity Company (formerly known as Lamington Road Limited), the Company’s wholly-owned indirect Irish subsidiary (“Lamington”), and White Eagle General Partner, LLC, the Company’s wholly-owned indirect Delaware subsidiary (“WEGP”) on November 14, 2018 (collectively with the White Eagle Chapter 11 Case, the “Chapter 11 Cases”), constitutes an event of default under White Eagle’s revolving credit facility (the “Credit Facility”), resulting in the principal and accrued interest due from White Eagle thereunder becoming immediately due and payable. Lamington and WEGP have pledged their respective interests in White Eagle to secure its obligations under the Credit Facility. Any efforts by LNV Corporation, the lender under the Credit Facility (“LNV”), or CLMG Corp., the administrative agent under the Credit Facility (“CLMG”), to enforce repayment by White Eagle and/or such pledges by Lamington and WEGP of their respective interests in White Eagle in connection with the Credit Facility are automatically stayed as a result of the commencement of the Chapter 11 Cases and LNV’s and CLMG’s rights of enforcement in respect of the Credit Facility are subject to the applicable provisions of the Bankruptcy Code. The previously announced Standstill Agreement among White Eagle, LNV and CLMG expired prior to the filing of the White Eagle Chapter 11 Case.
About EMERGENT CAPITAL, INC. (NYSE:EMG)
Emergent Capital, Inc., formerly Imperial Holdings, Inc., is a specialty finance company that invests in asset classes, primarily life settlements. The Company, through its subsidiary companies, owns a portfolio of approximately 630 life insurance policies (life settlements). The Company purchases individual policies and portfolios of life insurance policies and manages those assets based on actuarial and market data. The Company provides customized liquidity solutions to owners of illiquid financial assets in two markets, which include life finance and structured settlements. The Company focuses on lending to outright purchases of portfolios, to tertiary trades, as well as individual secondary market purchases. The Company invests in short and long-term life settlement investments.
