Notes Payable

3 Months Ended

Mar. 31, 2020

To provide for short term capital needs of the Position Holder Trust, if any, effective as of January 30, 2019, the Position Holder Trust entered into a $15 million revolving credit facility with Veritex Community Bank of Dallas, 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. There are no amounts outstanding as of March 31, 2020.

In accordance with the Plan, the Trust issued New IRA notes of $35.9 million in December 2016 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 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.

As of March 31, 2020, and December 31, 2019, the outstanding balances of the New IRA notes was $24.9 million. The sinking fund associated with these notes had balances of $2.3 million and $0.1 million at March 31, 2020 and December 31, 2019, respectively.

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. 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 March 31, 2020:


Years Ending December 31,	Long-Term Debt
2020	$	—
2021	—
2022	—
2023	—
2024	—
Thereafter	24,881,214

Total	$	24,881,214