The hopes of investors in troubled life settlement fund ARM Asset Backed Securities have been revived after $1.7 million (£1.1 million) of debts were written off by the provider ensuring it remains afloat.
In a statement to investors the ARM board announced $1,750,000 of debt will be written off resulting in a 60% reduction of operating expenses.
This move is set to give the board more time to find a buyer for the fund which would secure investors capital and resume payments.
Investors had voiced concerns that creditors could force the scheme into liquidation by demanding their money back before the board could secure a buy-out.
ARM has received fresh takeover offers after a bid from Insetco stalled in January.
At an ARM board meeting on 11 January it was decided that the company, under the supervision of Ernst & Young, would consider offers to salvage the life settlement fund.
A sale and purchase offer by Insetco lapsed on 30 November, though ARM said Insetco continued to cooperate with the aim to possible re-engagement.
The statement also announced that as of 29 February Intertrust Management would no longer be the administrator and its duties would be taken over by the ARM board.