Recent Developments
12-02-2003

      After the cash sale of the portfolio was terminated due to the purchaser's inability to obtain financing, the Conservator and his team began diligently pursuing other alternatives to salvage the remaining portfolio of life insurance policies. The Conservator engaged in intense negotiations with prospective purchasers to sell the portfolio on an installment basis. Ultimately, on November 26, the Court approved a sale of the portfolio for $34.9 million. The sales price is comprised of a $2.4 million down payment, which has been used to pay off the loan obtained to pay premiums, and a sharing of any death benefits (50% to the Conservator) and subsequent sales (75% to the Conservator) for a period of seven years.

       As a result of the sale, the purchaser has assumed all obligations to maintain the portfolio, including the obligation to make premium payments averaging $350,000 per month. The Conservator will immediately begin to set up a claims procedure to be approved by the Court and hopes to be in a position to make an initial distribution to the investors by the end of the first quarter in 2004.

      We will do our best to keep you informed of any developments that affect your investment as they occur or as we learn of them. Please remember that you can call the toll-free Investor Information Line at 1-866-852-6746 for updates regarding the Conservatorship.



                                                                          David M. Levine, as Conservator