ERON MORTGAGE INFORMATION WEBSITE
THE ERON LENDER COMMITTEE

MINUTES OF MEETING - April 6, 1999

 Joint ELC Project Leaders & All-Lenders Meeting
Secretary: S.Ripley
Royal Canadian Canadian Legion #148, Burnaby, B.C.


1. Tindle opened the meeting at 7:05pm, and welcomed the lenders in attendance (over 100). He stated the plan for the evening's presentations.


2. David Church updated the lenders on developments in the class-action lawsuit, and then informed them that a date had been set for the final hearing of the certification process, which will occur May 12 - 14.


3. Craig Bushell spoke at length about PWC developments and answered numerous questions:

* ABIL-Revenue Canada has not to date agreed to permit Eron lenders as a matter of course to declare their losses under the provisions of the Allowable Business Investment Loss (ABIL) section of the Canadian Income Tax Act.

* T1135-Eron lenders with a historical, cost basis set of foreign assets of CA$100,000. or more will be required to file a T1135 form.

* Distribution Plan-PWC's plan will go to Justice Tysoe by late April or early May. Once all the S.I.N.'s and B.I.N.'s and Trust N.'s are returned to PWC accurately, then PWC will begin the distribution process in detail. The zero-recovery projects will be administered first, with the PWC/Revenue Canada income/capital election-forms being sent to individuals on a project by project basis. PWC will notify the leaders of the projects well ahead of time, and enlist their help and the help of the ELC in completing the procedures. Contentious issues, such as priority and documentation, will have been, or will be, sorted out as the process evolves. For all projects, inter-company advances will be reconciled before payouts occur.

* Litigation-PWC continues formulating litigation against various parties; the details are confidential.

* Realizations-PWC continues negotiating the sale of the unrealized projects; details of the individual discussions are sometimes kept confidential for purposes of the specific deal-making.

* Trusteeship costs-PWC understands the Nov.13 / 98 Court interim taxation arrangement to remain in place, with David Craig having undertaken the responsibility of arbitrating problems relating to specific project direct costs. Net indirect costs will be proportionately distributed amongst those projects that have a net positive return of capital. PWC will provide the ELC a draft update of projects' direct and indirect costs. Because the Trusteeship is Judicial rather than Statutory, the fees are calculated on an hourly basis rather than by a statutory schedule of rates. . As agreed to by PWC in a settlement with Capital Place, PWC will pay from it's own assets any indirect costs attributable to Capital Place above an agreed capped amount. D. Patriquin explained the history of the deal to the lenders, and confirmed Bushell's commitment on behalf of PWC.


4. Tindle encouraged all lenders to attend important upcoming hearings: April 12 for the start of the BCSC investigations, April 15 for the Slobogian Appellate Court review, and May 12-14 for the final hearing of the class action certification. Tindle also informed the lenders that the RCMP may have obtained additional funding for their Eron investigation. Finally, Tindle advised the lenders that the ELC will be discussing with PWC a number of unreconciled policy issues about which it has become concerned because of conflicting information it has learned.


5. The meeting was adjourned at 9:30 PM. After the meeting the ELC met with C. Bushell, who explained in detail the merits of his strategy (based upon his lengthy professional experience) regarding the Slobogian bankruptcy process. The ELC members took a vote, which resulted in support of Bushell's plan.


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