ERON MORTGAGE INFORMATION WEBSITE
THE ERON LENDER COMMITTEE

MINUTES
Eron Lenders Annual General Meeting
Kitsilano Secondary School, Vancouver, B.C.
November 15, 1998

1. The meeting was called to order at about 12:20pm by the ELC Chair, David Craig. Craig welcomed the Eron lenders and thanked them for attending. About 400 lenders were in attendance, including many who had made the trip from Vancouver Island and other non-Lower Mainland locales. Craig referred to the Agenda and the ELC Financial Report, both of which had been given to attendees upon their signing-in. He outlined the sequence of topics on the Agenda and requested the lenders' agreement to this process, to which agreement was given. Minutes from the 1997 Eron General Meeting (the initial meeting at Capilano College on Nov.4/97) were unavailable.


2. Craig stated that the completion of the voting process for the new ELC would occur later in the meeting, and requested the agreement of the lenders to his appointment of Ted Butterfield (an Eron lender) to be the Receiving and Counting Officer for the ballots, most of which had already been submitted by mail. Those lenders who had brought their ballots to the meeting, or who had never received one, would vote at the designated time in the Agenda sequence. The lenders agreed with Butterfield's appointment without objection.

Craig invited the lenders to hear each of the electoral candidates give a brief speech on what they wished the ELC to accomplish for its second term. Each candidate did so: Steve Ripley, Anthony Jasich, Erika Inacio, James Tindle, Al Ferris. Candidate Don Smith was not present. Except for the three candidates contesting the two-person ELC Board - Tindle, Inacio, Ripley - all the others were to be acclaimed as Alternates. Craig noted that of the three individuals for the two-person ELC, only one (Ripley, as stated on the ballot) sought some honorarium support for the time and work commitment required of the position.


3. Craig reviewed the history of the ELC and lenders affairs during the past 12 months: the Eron Recovery Coalition initiated the organization of a coherent, single voice for lenders in October 1997 after Eron Mortgage Corporation was suspended on October 3, 1997. By October 8, 1997 through the energetic efforts of individuals such as Janet McDermott, Ian Wragge, Barbara Mayer, Jack Fong, Anthony Jasich, Ray Wolrich, Charlotte Trende and many other volunteers, the Eron Recovery Coalition created order out of the chaos in which Eron lenders had been left. Craig praised the individuals who had the foresight, initiative and energy to take these bold steps at a time of despair and shock. Through the subsequent months structure was given to the lenders' interests as the process of trusteeship and receivership became institutionalized through Price Waterhouse and the B.C. Supreme Court.


The period November 1997-February 1998 saw significant achievements despite the inevitable mis-steps and opinion conflicts that might be expected to beset any organization of 3000 strangers upon whom a disaster had fallen. Projects were organized and given structure and process formats, monthly Project Leader meetings were begun, liaison and inquiries with PW, the Court, Laurentian Bank, Canadian Western Trust, the RCMP and Revenue Canada. Hobart's FICOM office was contacted and a meeting held; investigations were begun of assorted individuals, and class action, civil and criminal lawsuits were first promulgated.

In February 1998 a change in leadership of the ELC was required after three resignations occurred that resulted from differences between some of the ELC and some of the lenders about assorted matters. Earlier in the first term, two other ELC members had resigned for other reasons. Consequently, of the original seven members elected by the Eron lenders in November 1997, only Craig and Ripley remained to continue the work of the ELC.

In March, 1998 Craig and Ripley published their 'Transition Plan' and selectively continued the major themes of the ELC: realization of lenders' $ funds, distribution of lenders' $ funds, litigation to recover lenders' $ funds, and development of the communication channels amongst lenders and between lenders and the institutions to support these objectives. Various other initiatives were undertaken: PWC bill taxation to save lenders' $funds, B.C. government negotiations (preliminary) to learn if the ELC could recover $funds for lenders (including a letter-writing campaign and petition), Revenue Canada issues to save lenders' $ funds. Assorted other problems were also attended to: preparation of the election and AGM, reconciliation of the Ladner Downs bill, a questionnaire to all lenders about honorariums, continuing organization of volunteers, and so forth.

Craig estimated that the direct and indirect savings resulting from ELC and volunteer efforts was likely to have totaled about $1 million to date. Continuing on the theme of recovery of lender's $ funds Craig discussed the class action suit that the law firm Camp Church and Associates has initiated on behalf of lender M.F.Cooper against R.Hobart and the Government of B.C. All lenders residing in B.C. as of October 3, 1997 who had funds administered by Eron Mortgage Corporation, E.I.C. and E.F.S. will be members of the class if the action is certified as a 'class action' by the B.C. Supreme Court. The period forward from which the class action has been focused is August 26, 1997, but that date may be changed to an earlier one depending upon the evidence as it is discovered.

Craig referred to the distribution problem that lies beyond the problem of realization of funds by individual projects. The distribution hearings, determining pooling vs. non-pooling of assets, will begin within 30-60 days. Craig requested by a show of hands an indication of lender sentiment regarding preference for a pooling vs. non-pooling solution to the distribution problem. A distinct majority of those attending preferred non-pooling.

Craig closed this section of the Agenda by stating that the challenge before lenders was to show the culpability of the regulators in this disaster. In response to the provincial Government's denying any responsibility for what had happened Craig offered a rallying cry: "No duty to care" - it's not fair!. This was greeted by loud and sustained applause.


4. Craig next requested the lenders to look at their copies of the Financial Report for 1997-98. Depending on the outcome of a challenge to the Application (initiated by A.Jasich) heard before Judge Tysoe on November 13, 1998, the ELC may end its fiscal year in a deficit position or in a positive balance. The difference relates to the amount finally determined to be owing to Ladner Downs law firm and how it is to be paid. Craig stated that technically speaking, he and Ripley would be liable for the amount (something over $15,000) if the Court did not approve the payment, although Craig added that Ladner Downs had told him the firm would not hold the members of the ELC personally responsible. Eron lender Jack Rockendal expressed his interpretation of the implications of the aforementioned application, and noted that the Court discussion over the value of the segments of the early ELC work, and the costs attendant to it, were also called into question An affidavit evaluating these matters is to be prepared by PWC for the Court and A. Jasich. Rockendal stated he believed Ladner Downs took advantage of the ELC and acted unethically. Craig responded by expressing a somewhat different interpretation of the events of the Nov.13th Court hearing. Barbara Mayer expressed her opinion that the costs of start-up organizations such as the ELC- when there are so many unknowns- are understandably higher and more unpredictable than when an organization has reached an established stage. In retrospect, she said, it is easy to criticize decisions which at the time were surrounded by uncertainties that were a part of the general ignorance of such rare predicaments, such as that in which Eron lenders had then found themselves.

Craig asked for a show of hands from lenders as to whether they supported a Court decision that approved payments of this outstanding debt from general assets, noting that per $100,000 of any creditor's loan total, the cost would amount to about $8.00. Anthony Jasich rose to object to Craig's invitation to lenders, stating it was a point of order due to the matter being before the Court. Craig asked the lenders for a show of hands as to whether they wished to concern themselves about Jasich's point of order. Lenders indicated by their show of hands an overwhelming majority favoured Craig's proposed question being asked of the lenders, which proposal was then given an expression of support by an overwhelming majority - i.e. support was given to the idea that from Eron's general assets the outstanding balance owed to Ladner Downs be authorized by the Court to be paid.

In response to a question from a lender about the number of Eron lenders who had so far contributed to the ELC, Craig replied that about 2/3 's had not yet done so, which news was met with some grumbling from the crowd.


5. Ripley spoke briefly about ELC and lenders' communications matters. He first profusely thanked the many volunteers who had worked throughout the first year, noting those who had brought together the organization for the 1998 Annual General Meeting. He especially thanked two individuals who had through their initiative and creativity been of outstanding service to himself and Eron lenders during the months since February: Wendy Menghi and D'Ann Madsen. He stressed the importance of lenders keeping in touch with their project leaders on a regular basis, and in particular that they ask their project leaders for the monthly newsletter. He invited lenders to look into the PWC\ Eron website, which is a regularly updated source of information and archive for Eron affairs. He thanked John Hall for his hard work, ingenuity and expertise as the volunteer Database Manager. He requested that those individuals who had changes of address and/or telephone numbers be certain to contact John Hall and PWC. He noted that s petition was being passed around the meeting hall for lenders' signatures.


6. Craig introduced Ted Butterfield, who sat on stage at a desk upon which the ballot box was placed. Craig asked lenders who wished to cast their ballots to do so at this time. After a short break in the proceedings, Ted Butterfield reported the results of the ELC election: a total of 534 valid ballots were cast In favour of Tindle being a member of the next ELC were 92% of the votes, in favour of Ripley were 80%, in favour of Inacio were 25%. Applause was given by the lenders for each of these three leaders who had offered to carry on the time consuming and troubling tasks of the ELC.

Craig asked the lenders for a show of hands expressing acceptance of Butterfield's report, to which there was unanimous agreement He then asked for those who objected to the report to so indicate, noting this was the time to do so if any one had concerns about the election process. As no one objected, the report was passed unanimously. Craig then requested a show of hands regarding destruction of the ballots. Unanimous approval was given.


7. Craig thanked all lenders for their support this past year and was given a sustained round of applause. He introduced Ripley, who first gave a personal commendation to Craig for his hard work, creativity and integrity - this elicited further applause from the lenders. Ripley then introduced James Tindle, who the nominees had previously informally elected as the new Chair of the ELC. Tindle spoke to the lenders about his plans for the 1998-99 period, stressing the continuing importance of the class action lawsuit, as well as other civil and criminal litigation. The lenders strongly applauded his leadership in this direction.


8. At about 2:35pm David Craig closed the 1998 Annual General Meeting with thanks to all the lenders for their participation in this ongoing challenge. The meeting was then adjourned.


Minutes respectfully submitted by Steve Ripley.


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