Monday, March 2, 2015

No. 86: Life Partners—The NASDAQ Delisting Situation

In No. 84 posted February 25, I reviewed several significant recent developments since Life Partners Holdings, Inc. (LPHI) filed for bankruptcy protection under Chapter 11 of the U.S. bankruptcy law. Subsequent to the filing, LPHI received three notifications concerning the possible delisting of its shares, which are traded on NASDAQ.

The First Notice
On January 20, the day of the bankruptcy filing, NASDAQ notified LPHI that the bankruptcy filing placed the company in violation of NASDAQ listing rules, and that the company's shares therefore will be delisted. LPHI said it was planning to appeal the ruling and that, if the appeal is not successful, the shares may be eligible to be quoted on the Pink Sheets if a market maker applies to perform that function and is approved.

The Second Notice
On February 2, NASDAQ notified LPHI that the company did not meet the minimum bid price requirement in NASDAQ listing rules because the minimum bid price per share was below $1.00 for 30 consecutive days. The price lately has been fluctuating in a fairly narrow range around 20 cents per share. The company has until August 3, 2015, to regain compliance with the minimum bid price requirement, and may be eligible for additional time.

The Third Notice
On February 23, NASDAQ notified LPHI of three public interest concerns that constitute an additional basis for delisting the company's shares. The concerns, which relate to the Securities and Exchange Commission (SEC) lawsuit against LPHI and its top officers, are:
  • The jury findings that LPHI's executive officers participated in filing false and misleading financial statements with the SEC.
  • The history of egregious misconduct by LPHI's executive officers.
  • LPHI's failure to make prompt disclosure of material information, particularly the approximately $46 million in sanctions imposed on LPHI and certain of its executive officers by the December 2 Final Judgment Order, until the January 14 filing of the 10-Q report for the fiscal quarter ended November 30, 2014.
LPHI has requested a hearing about the delisting proceedings, and the hearing is scheduled for March 19, 2015. There can be no assurance the company will be successful in the appeal.

General Observations
This is my first detailed experience with the NASDAQ delisting procedure. It strikes me as a lengthy process. Also, it is unclear what arguments LPHI can make at the March 19 hearing that would persuade NASDAQ to refrain from delisting the company's shares.

I am offering a complimentary six-page PDF consisting of the three LPHI announcements about the delisting proceedings. On the first of the three, I have indicated the date of the announcement and shown the correct date on which LPHI received the NASDAQ letter. Send an e-mail to and ask for the LPHI delisting package.