Notes Payable

12 Months Ended

Dec. 31, 2019

On December 9, 2016, the Trust obtained a term loan (or the "Exit Loan Facility") from Vida Opportunity Fund, LP, an affiliate of Vida Capital, Inc., for $55.0 million. Interest accrued at 11% of outstanding balance per annum and was paid quarterly. Substantially all of the Trust’s assets collateralized the term loan. The Trust made principal payments of $31.0 million in 2018 leaving a balance outstanding on the term loan of $4.0 million at December 31, 2018. The maturity date of the term loan was December 9, 2018; however, an extension was agreed to until June 7, 2019. Effective as of January 17, 2019, the Position Holders Trust paid the remaining balance in full related to the Exit Loan Facility and terminated the $55.0 million Exit Loan Facility with Vida Opportunity Fund, LP. All liens and security interests of the lenders under the Exit Loan Facility have been terminated and released.

On December 9, 2016, the Trust entered into a revolving line of credit with Vida Longevity Fund, LP, an affiliate of Vida Capital, Inc., for $25.0 million. Interest accrues at 11% of outstanding balance and is paid quarterly. The line of credit matured on December 9, 2018, at which point there was no amount outstanding. As of December 31, 2018, there were no amounts outstanding on the line of credit and the line of credit facility was terminated in January 2019.

To provide for short term capital needs of the Position Holders Trust, if any, effective as of January 30, 2019, the Position Holders Trust entered into a $15.0 million revolving credit facility with Veritex Community Bank of Dallas (“Veritex Credit Facility”), Texas. The Veritex Credit Facility, is secured by a lien on the Position Holder Trust’s assets, has an initial 2 year term and, as to any amounts drawn thereunder, shall bear interest at the rate of 6% per annum.

In accordance with the Plan, the Trust issued New IRA Notes of $35.9 million in exchange for claims against the Debtor’s estate and the incidental interests in life insurance policies. Those policies collateralize the Trust’s obligations under the notes. Interest accrues at 3% of outstanding balance and is paid annually in December. Principal is due in full on December 9, 2031. In accordance with the New IRA Notes, beginning in December 2017, the Trust is required to make annual payments to a sinking fund for the principal payment due at maturity. Such fund is included in restricted cash on the accompanying balance sheet.

On August 1, 2019 the Trust redeemed in full all New IRA Notes having a balance of $5,000 or less and made partial redemptions of all remaining notes equal to 2/15ths of the original balance of those notes. The total amount paid was $5.7 million and only funds set aside in a sinking fund established pursuant to the Bankruptcy Plan for that purpose were used. On December 15, 2019 the Trust redeemed in full all New IRA Notes having a balance of $7,500 or less and made partial redemptions of all remaining New IRA Notes equal to an additional 2/15^th of the outstanding balance of those notes. Accrued interest on all New IRA Notes through the redemption dates was paid as well. The total amount paid in connection with the second redemption was $5.9 million again using only funds out of the sinking fund.

In 2019 there was a conversion of notes payable to IRA Partnership and Trust units of $0.3 million based on changes to elections for certain unit holders which were in dispute and resolved through settlement, mediation or court order.

On March 28, 2017, the Trust, was ordered to pay the Chapter 11 trustee’s fees totaling $5.5 million. The first payment of $2.8 million was paid in 2018. The remaining balance is in the form of a note payable in the amount of $2.8 million and is due in three equal annual payments on January 1 beginning in 2019. The note does not bear interest as ordered by the Court, thus the note has been discounted by $0.2 million, based on an implied interest rate of 3%. On January 11, 2019 the Trust paid the first installment and on December 27, 2019 the Trust paid the second installment. Subsequent to the end of the reporting period, on January 27, 2020 the Trust paid the final installment and the note has now been completely satisfied.

Future scheduled principal payments on the long-term debt are as follows as of December 31, 2019:


Year ending December 31,	Note Payable
2020	$	889,968
2021	—
2022	—
2023	—
2024	—
Thereafter	24,881,214
Total	$	25,771,182