Insurance Investor Emergent Capital Cleared to Exit Bankruptcy

Emergent Capital Inc., the bankrupt holder of interests in a $2.4 billion portfolio of life insurance policies, won approval to reorganize in bankruptcy after settling fraud claims over a premium financing agreement.

Emergent and affiliated debtor Red Reef Alternative Investments LLC are restructuring $117 million in noteholder obligations by issuing new notes through a Chapter 11 plan.

Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware approved the restructuring plan during a telephonic hearing Wednesday. The judge also blessed a deal resolving litigation between Emergent and a family trust that sued the company over an alleged ...