March 2022

U.S. Federal Income Tax Matters
Updated March 11, 2022

Set forth below is a brief discussion of certain U.S. federal income tax consequences of distributions with respect to the securities issued by Lamington Road Designated Activity Company (“Lamington”) to taxable U.S. persons who hold securities in Lamington that should be treated as equity for U.S. federal income tax purposes (each, a “Lamington Securityholder”).  This summary does not discuss all U.S. federal income or other tax consequences that may be applicable to a Lamington Securityholder in connection with a distribution from Lamington nor does it discuss the U.S. federal income tax consequences to persons subject to special tax regimes.  Each holder of Lamington securities should consult with its own tax advisor regarding the U.S. federal, state, local and non-U.S. tax treatment to it from receiving distributions from Lamington.

Emergent Capital, Inc. (“Emergent”) prior to its liquidation, included its gross taxable income for U.S. federal income tax purposes on a flow-through basis certain income from Lamington, its Irish subsidiary, referred to as “global intangible low-taxed income” (“GILTI”).  As a consequence of the inclusion of such GILTI in its gross income, had it not liquidated, Emergent would have been entitled to receive tax-free distributions from Lamington up to the amount of such prior GILTI inclusions. Such distributions, which are permitted to be received free of U.S. federal income tax, generally are referred to as “previously-taxed income” (“PTI”) and the amount of PTI which Emergent would have been entitled to receive as of immediately prior to its liquidation is referred to herein as the “PTI Amount”.

Although there is no direct authority on the matter, set forth on Emergent’s website (https://emergentcapital.com/) is its determination of the amount of PTI that was allocated among the three classes of Lamington securities outstanding: the Class A Notes, the Class B Notes, and the “profit participating notes” held through the owner trust as of April 7, 2021(i.e., the date of Emergent’s liquidation).  As a result of Emergent’s liquidation and distribution of Lamington securities, Lamington Securityholders should succeed to a portion of the PTI Amount.

The per security denominations set forth on Emergent’s website are valid only for Lamington securities issued and outstanding as of April 7, 2021. Lamington Securityholders who acquire Lamington securities issued after such date, including pursuant to any payment-in-kind distributions made after April 7, 2021, would not have any PTI allocation with respect to such securities.

The tax-free distributions of PTI by Lamington will reduce a Lamington Securityholder’s tax basis in the securities with respect to which the distribution is received. Accordingly, for U.S. federal income tax purposes, a Lamington Securityholder may recognize additional taxable gain or less taxable loss on the sale of such securities or upon the ultimate liquidation of Lamington.

Lamington will not provide any additional information regarding the amount of PTI allocated to any Lamington Securityholder or the Lamington Securityholder’s remaining share of the PTI Amount. As such, each Lamington Securityholder should keep records of the amount of distributions which it receives from Lamington that are attributable to PTI.

After a Lamington Securityholder has received distributions equal to such Lamington Securityholder’s share of the PTI Amount, any additional distributions to the Lamington Securityholders should be treated first as a dividend to the extent of the greater of Lamington’s current and accumulated earnings and profits. Assuming that applicable holding period requirements are satisfied, such dividend income generally should be treated as “qualified dividend income” for U.S. federal income tax purposes, which is eligible for the favorable rates applicable to long-term capital gain when received by a non-corporate taxpayer.

This summary was prepared as of the date set forth above. Lamington undertakes no responsibility to update this summary, including to reflect any change in law or fact. As noted above, each holder of Lamington securities should consult with its own tax advisor regarding the U.S. federal, state, local and non-U.S. tax treatment to it from receiving distributions from Lamington, whether in cash or in kind.

A U.S. person holding a beneficial ownership interest in a foreign trust is generally required to disclose such ownership to the Internal Revenue Service by filing Form 3520.  Please consult your tax advisor.

This notice addresses the delivery of the Issuer’s annual financial report for its fiscal year 2021, within 120 days after such period end as required by Section 4.05 of the Indenture. As a result of the significant demands of the Company’s restructuring transaction completed in April 2021, and due to delay caused by the COVID-19 pandemic, the Issuer has required additional time to complete its financial closing procedures and reports, and has been unable, without unreasonable effort or expense, to deliver such reports within 120 days after the end of its fiscal year, as required by Section 4.05. The Company will deliver its annual financial report for its fiscal year 2021 as soon as practicable.