Langston and Bruno

RLB partners Keith Langston and Klint Bruno filed a case against Life Partners, Inc. (“LPI”) in March of 2011 on behalf of a class of consumer investors who had purchased viatical and life settlements from LPI. The class action sought relief under a provision of the Texas Securities Act for refunding the purchase price of the investment because LPI was selling unregistered securities. LPI, relying on a federal case from the DC Circuit Court of Appeals and a state case from the Waco Court of Appeals, claimed the life settlements were not securities. The trial judge agreed and granted LPI’s motion for summary judgment and entered an order of sanctions for filing a frivolous lawsuit. The class members appealed this decision to the Dallas Court of Appeals. In a unanimous 3-0 opinion, the Dallas Court of Appeals reversed the trial court’s decision finding that the investments were in fact securities under the TSA. The Court of Appeals also overturned the trial court’s erroneous sanctions motion. LPI appealed this decision to the Texas Supreme Court. In May of 2015, the Texas Supreme Court, in another unanimous opinion (9-0), held that Life Partners’ life settlements were securities under the Texas Securities Act.

Meanwhile, LPI’s business model was faltering because it did not have the ability to continue to pay premiums on policies that it sold to consumers. This was a result of faulty life expectancy values LPI obtained. LPI filed a voluntary bankruptcy petition in January of 2015. Langston and Bruno continued to advocate for its clients throughout the two year Chapter 11 reorganization process to ensure that our clients got as much of their money back as possible. Many bankruptcies end up with creditors and investors getting nickles or even pennies on the dollar. Langston and Bruno wanted to make sure this didn’t happen to their clients, many of whom had invested their life savings in LPI. During the pending bankruptcy Langston and Bruno filed two additional class action adversary cases—one with claims similar to those filed against LPI in state court in 2011 and an additional case asserting that the class were, in fact, the owners of the life settlement securities which were not part of the bankruptcy estate.

Through these class action cases in the bankruptcy court, Langston and Bruno were ultimately able to protect their clients’ investments and their ownership rights. After being appointed class counsel, they were able to secure a settlement that has been estimated to be worth approximately $1.1 billion for the class members and could, in fact, turn out to be worth considerably more. Instead of getting pennies on the dollar, class members are estimated to receive more than 90% of their originally invested funds. Amazingly, even after bankruptcy, some class members will still make a profit on these investments. Judge Russell Nelms describe the results obtained in the settlement as “superior, both in terms of creativity and ultimate return to investors.” And, he praised Langston and Bruno for demonstrating “great courage and commitment by taking on this challenge” because the case demanded, “a high degree of skill on the part of all professionals and Class Counsel demonstrated that skill.”