To the Lenders in Project #1202
Angel Care 3rd Mortgage
November 5, 1997
As indicated in our letter to lenders dated October 22, 1997 we will be providing information to lenders through regular project updates. Unfortunately, due to the poor quality of Eron's accounting and lender records we are presently unable to answer all the questions you may have. However, based on our initial findings we can address the frequently asked questions set out below. We stress that the information available to us is subject to verification and accordingly our findings are subject to change as more information becomes available.
What is the current status of the project?
This is a 3rd mortgage on the principal residence of Merideth Broadway and the J & K Baystore Marina. This mortgage is currently in good standing.
How much was supposed to be raised for the project?
$351,000.
According to Eron's records how much was actually raised for the project?
The records of Eron indicate that approximately $351,000 was raised for the Angel Care 3rd mortgage.
According to Eron's records how much was advanced to the project?
Approximately $291,000, the remainder of the money raised would appear to have been taken as fees, commission or used to establish an interest reserve.
What security was taken on the project?
A 3rd mortgage in the amount of $351,000.
Are there any mortgages or other loans in priority to the project security?
The following mortgages appear to have priority:
- A 1st mortgage held by Royal Bank of Canada in the amount of $500,000.
- A secured line of credit held by Canada Trust in the amount of $172,000.
- A 2nd mortgage held by Eron Mortgage Corporation in the amount of $790,000.
What is the value of the project?
We have requested an "Opinion of Value" report of the property, which is to be received by the end of November, we prefer not to speculate on the value, rather we will advise you of the result of this report.
Are there any other security or guarantees which might increase recovery on the project?
Yes, the following additional security would appear to be available:
- Personal guarantee of Les Broadway
- General Security Agreement, in 3rd position from 449042 B.C. Ltd. and J & K
- Baystore Marina Ltd.
The value of this collateral is not yet known, we anticipate gathering this information by the end of November.
Will I get my money back?
It is too early to tell definitively how much of your money will be recovered.
When will I get any money back?
It is likely to be many months before any money is available to lenders.
We caution you that the information available to us is still incomplete and limited in scope. Nothing in the foregoing should be construed as guaranteeing any return of funds. We will keep you informed on a regular basis and will issue a further project update on or about November 30.
In the meantime if you have any further questions or information concerning the project please contact us in writing at the above noted address or by fax at (604) 688 6128.
Yours truly
Price Waterhouse Limited
Judicial Trustee
