ERON MORTGAGE INFORMATION WEBSITE
THE ERON LENDER COMMITTEE

MINUTES OF MEETING - JUNE 2, 1998

Joint Eron Lenders Committee - Project Leaders Meeting
Royal Canadian Legion Hall - North Burnaby, B.C.
Recorded and written by D'Ann Madsen, edited by Steve Ripley

1. The meeting was called to order by David Craig at 7:00 pm. He began by referring to the Minutes of the May 5th meeting and the ELC Newsletter of June 2, 1998, both of which will be posted on the Eron website: www.eron-pwl.com

2. The second item on the agenda was a report on Price Waterhouse bills. David Craig met with PW and Russell & DuMoulin. Craig stated that PW's reaction to the proposed 15% reduction in their bill dated October '97 to January 31 '98, was a general willingness to talk and a belief that they would nudge somewhat, perhaps by 5%. Campney and Murphy are not willing to discuss any discounting. Russell & DuMoulin responded by saying their billing was already discounted by all the week-end and evening hours that have not been included in their bill. David Craig stated that we now have to take the issue to court, but that we are likely to get sympathy for our target of a 10% to 15% reduction. Under the Bankruptcy and Insolvency Act, there are no particular guidelines for fees. Project leader, James Tindle, suggested there should be separate billing for PW activities as judicial receivers on behalf of Eron lenders vs. judicial trustees as requested by Brian Slobogian, the latter activity to be paid for by the government.

3. The third item on the agenda was "Authorization to Negotiate with the Provincial Government of B.C." This form needs to be distributed to each Eron lender so the ELC has a mandate for unified action. The key route for distribution will be in an upcoming Price Waterhouse mailing in approximately one month. Craig stressed the importance of project leaders assisting in the communication with lenders in order to get a response to this authorization. Responses to a second form will be required when the ELC has a firm proposal to make to the government.

Project leader, Anthony Jasich, encourages writing hundreds of letters to the Premier. David Craig suggested that this step has importance only if it is done in the correct sequence and at the appropriate time for maximum results, and suggested that he is formulating a plan for the fall of 1998.

4. The fourth item was regarding the questionnaire recently received by some Eron lenders from the B.C. Securities Commission. The concern is that in answering these questions, Eron lenders may be assisting in the Securities Commission formulation of a litigation defense. David Craig's suggestion was that we should cooperate and answer questions with this exception: do not provide information about your having spoken to the Securities Commission or FICOM for advice regarding Eron, rather send such information to the ELC. There were mixed responses from the group about answering this questionnaire. The ELC guesses it will not have access to the information obtained by the Securities Commission.

James Tindle stated that the B.C. Securities Commission knew Eron Mortgage Corporation was dealing illegally in securities from August of 1996, when Eron was sent a letter from FICOM. Although the Securities Commission has had two persons working with Price Waterhouse since October of 1997, they will not respond to requests from Eron lenders or share information in their files. Tindle suggested that we may get a response if we formally request a copy of correspondence sent by FICOM to Eron as of a specific date.

Project leader, Warren Evans, stated that before investing in Eron he contacted by telephone the B. C. Securities Commission, FICOM, and the Better Business Bureau. None of them gave him any indication of problems. David Craig has been advised by lawyers that rather than a legal issue, the conduct of FICOM appears to be a moral issue, and that lax supervision allowed Eron to continue to perpetrate this crime.

One lender stated that the Institute of Chartered Accountants has not initiated an investigation of auditor, Douglas Reid, or his financial statements prepared for Eron.

5. The fifth item on the agenda was 'Preparations for Making our Case'. Jack Rockendal of the Volunteer Legal Committee has spoken to John Grieves of Russell & DuMoulin regarding legal action against associates of Eron. Regarding Douglas Jackie, a case will be filed in the next two weeks for $10 to $20 million. It appears his insurance pays a maximum of $1 million/year. He may be sued for four years of work. Rockendal proposed that individuals could sue in addition to the class action.

Regarding Michael Schultz of Alexander & Holburn, no case has been filed to date. Consideration is being given to cases against others such as Adolf Schiel and Martin Chambers.

Rockendal has spoken with many lawyers in his search for someone to work on a contingency basis. He has been informed that we must be able to prove "bad faith actions" by FICOM, not just stupidity or negligence. "Bad faith" can be defined as: conduct that is other than frank or impartial, or undertaken for ulterior or an unpermitted purpose. James Tindle requested that lenders should ask their sub-brokers if anyone at FICOM or the Securities Commission was receiving favors from Slobogian or Biller. Rockendal concluded by saying that we have a strong moral case on many points.

Lender, Tamara Gallo, has spoken with J. Mitchell of FICOM and was told that insufficient information with respect to Eron and its sub-brokers has been received from lenders. Gallo suggested that a large group of lenders go to the steps of Parliament in Victoria.

David Craig reiterated that in preparation for making our case, we must pull together our abilities and act in unison. He supports a coordinated, political force requiring many lenders to act on a sequence of events, suggesting that letter-writing comes before a public demonstration in Victoria.

Project leader, Ted Butterfield, suggested creating more focus groups and the need to start recruiting more members to the Eron Lenders Committee. At the July 7th Joint ELC - Project Leaders Meeting, the nominations process will begin for the second year of Eron activities.

6. Because of time constraints, Steve Ripley briefly covered the remaining items on the agenda, reminding the group of the retribution aspect of our activities, i.e. the importance of seeing those individuals responsible pay for their actions. He referred to the summer and fall schedule, pointing out that the next meeting is on July 7th and there will be no meeting in August. Any suggested additions to the schedule should be given to Steve Ripley.

Steve reminded project leaders to post their updates on the new website: www.eron-pwl.com Should you need assistance in this activity, a new volunteer, David Jackson, can be contacted by fax #986-6215 or email: www.vanlang.com

The Volunteer Communications Committee has almost finished updating the postal and email addresses, as well as phone and fax numbers of approximately 3,600 Eron lenders. Erika Inacio asked for updated lists from a few remaining projects. John Hall, who is reorganizing this new information using Microsoft's Access, asked for assistance from a data-base expert.

The final item on the agenda was issues for Price Waterhouse to address at the July 7th meeting, especially the distribution issues of specific projects.

The meeting concluded at 9:00 pm.




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