Fresh bids lift hopes for troubled life settlement vehicle

Troubled life settlement vehicle ARM has recieved fresh takeover offers after a bid from Insetco stalled earlier this month.

At an ARM Asset Backed Securities board meeting on 11 January it was decided that the company, under the supervision of Ernst & Young, would consider offers to salvage the life settlement fund. The offers will raise hopes ARM could escape liquidation, and save consumers facing losses.

A sale and purchase offer by Insetco lapsed on 30 November, though ARM said Insetco continued to cooperate with the aim to possible re-engagement.

In a statement, the ARM board said: ‘Since the lapse of the sale and purchase agreement, a small number of other offers have been received by the board, these offers have been under negotiation for a number of weeks and are entering the final stages of being presented to the company as viable options.’

The board announced it was also calling for additional offers which would be presented to bond holders for a vote in due course.

‘The board will now proceed to obtain detailed offers in a format prescribed by the board. It will then evaluate the pros and cons of each, the background of each offerer, the financial strength and modelling of each proposal and above all the strength of the offer for the benefit of the bond holders,’ the statement said.

The Insetco bid to buy ARM’s assets could have given clients up to a 7.5% return and their capital back, and avert complaints falling on the Financial Services Compensation Scheme. The bid had raised hopes that ARM would escape liquidation, preventing consumers – such as the 800 clients of Rockingham Retirement who invested in the fund - from suffering losses. Insetco launched the bid after the Luxembourg regulator, the Commission de Surveillance du Secteur Financier, refused to grant ARM a licence, citing a lack of compliance with prudential and legal requirements.