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THE ERON LENDER COMMITTEE

Eron Lenders Committee Newsletter: April 23, 1998

Since the March 3, 1998, joint meeting of the ELC and the Project Leaders, a number of steps have been taken to continue and complete the re-organization that began with the "Transition Plans" mandate, which was offered by the ELC to Eron lenders through their Project Leaders after the resignation of three of the ELC's five members.

This newsletter will summarize what has been done on your behalf by the remaining ELC members and by dedicated volunteers who together have contributed their efforts and time to ensuring the continuation of a coherent voice towards recovering as much of our capital as possible.


Capital Preservation, Enhancement and Recovery

1. Price Waterhouse bills: A total of approximately $3.5 million is billed by Price Waterhouse for the period October 3, 1997 to Janurary 31, 1998. This amount includes accounting and legal services which, separately, your volunteer committees have begun to examine. Because of the size and complexity of the bills, the volunteer committees may require specific, limited professional expertise to be hired to guide their initial efforts. To date it is evident that in certain instances, the presentation of the billings is insufficient to be evaluated fairly without further explanation from the respective accountants and lawyers. Aside from such questions about the presentation of the information, a number of more particular objections about the dollar amounts of specific items have arisen from the committee's initial assessments. These items will be addressed in discussions with Price Waterhouse, which will occur over the next several weeks prior to a conclusion of the billing-taxation process, and the resulting application to Court for approval of the final amounts. We expect any significant differences of opinion may be resolved by negotiation, but otherwise the ELC will bring to Judge Tysoe on behalf of all lenders the outstanding difficulties for his resolution.

-- Volunteer Committee for PW bills (Accounting):
Verne Cinnamon, Ted Butterfield, Brian Robson.

-- Volunteer Committee for PW bills (Legal expenses - Russell & DuMoulin,
Campney & Murphy, and Perkins & Coie): Jack Rockendal, Mike Buchanan,
Konrad Tittler, Darlene Godard.

2. Ladner Downs' bill: The completed billing to the ELC from Ladner Downs for all work to date amounts to approximately $110,000, of which over $90,000 has been paid from ELC funds. The bill will be reviewed by the legal audit committee during the next several weeks.

-- Volunteer Legal Committee: Jack Rockendal, Mike Buchanan,
Konrad Titler, Darlene Godard.

3. ELC Honorarium Committee: The committee was unable to reach an unanamous agreement. In the absence of consensus, David Craig presented his suggested choices to the Joint ELC-Project Leaders meeting. A poll was taken and the results will be reported at the May 5th ELC-Project Leaders meeting.

-- Volunteer Honorarium Committee: Peter Kwok, Penny Cooper, James Tindle,
Barbara Mayer, Jack Rockendal, Konrad Tittler.

4. Class Action Litigation: At the April 7, 1998, Joint ELC-Project Leaders meeting, Mr. Gordon Johnson of Ladner Downs summarized his work to date, and presented the Ladner Downs general guide to class action litigation.

An integration of Gordon Johnson's work with that of Russell & DuMoulin and Price Waterhouse has begun, a meeting having been held with Gordon Johnson, John Grieves, Jamie Engen, and David Craig in attendance. The potential defendants being examined for liability include government agencies, financial institutions, professional advisors working for Eron, and Eron principals, employees, and relatives.

The ELC is aware of the possibility that lawsuits may be contemplated by groups of lenders independently of the ELC, and the ELC will facilitate cooperation between any legal actions contemplated.

-- Volunteer Committee for class action work: Jack Rockendal,
Mike Buchanan, Konrad Tittler, Darlene Godard.

5. Specific Recovery, current initiatives:
-- Frank Biller bankruptcy: The ELC's understanding to date is that Biller's remaining assets are largely Eron-related investments, and his liabilities are overwhelmingly Eron-related debts. Therefore, in order to make the disposition of his affairs as efficient as possible for Eron lenders, and to save money for Eron lenders from the process, the ELC will take the initiative (in conjunction with Price Waterhouse) of discussing with Biller's bankruptcy trustee a more cost effective approach to the disposition of those assets. On behalf of the ELC, Steve Ripley will serve as an Inspector for the Biller Creditors' Committee. The other Inspectors are: Jervis Rodriquez (PW),Anthony Jasich, and Bill Higgins (Revenue Canada).

-- Michelle Biller: Conjecture has arisen that she will file for bankruptcy and that there are assets in her name that may be attachable by Eron lenders. With Price Waterhouse, the ELC will monitor this matter to ensure that if there is a possibility of capital recovery from any of her assets that may rightfully belong to Eron lenders, then those assets will be appropriatey pursued by ourselves.

6. Special Investigations: The ELC reminds all Eron lenders and Eron-related friends of lenders to forward any specific information they may learn that might lead to the discovery of offshore bank accounts for whom the beneficial owners are Eron princpals and associates that may be culpable in the Eron collapse.

7. RCMP: To date the RCMP has disclosed no new developments from their Eron investigation.
-- Volunteer coordinator: James Tindle, phone: 438-0915 or fax: 438-2795

8. Media: The ELC continues to work with the media to encourage coverage of the Eron lenders' pursuit and recovery of their funds. David Craig coordinates this task. James Tindle is assisting as an unofficial spokesperson on behalf of lenders.

9. Price Waterhouse/Revenue Canada taxation issues: The ELC continues discussions with PW about the problems surrounding the T5s' issuance, and reminds lenders to refer to the PW website (www.eron-pwl.com) for answers to many of your questions, or otherwise to contact Vincent Lee at PW, tel: 669-5087.

For one project, Seasons Memorial Park, Price Waterhouse will be issuing revised T5 slips to reflect the dividend component of payments received by Seasons' creditors/shareholders.

10. E.I.C. Court Application by PW: The April 23, 1998, appearance before Judge Tysoe resulted in an adjournment of the proceedings until mid-May, or possibly later. Three volunteer steering committees have been formed representing the differing interests of Eron lenders. Each committee has hired a lawyer, the expenses for which are to be paid from EIC assets and general Eron assets , as ordered by Judge Tysoe on April 7, and April 23,1998.


The viewpoints represented by the committees are as follows:
-- Those individulas who are identified by Price Waterhouse as having been allocated from EIC to specific projects should remain in their respective projects as lenders and not be returned to an all-EIC ,separate pool of lenders A volunteer committee has been formed to represent this objective.
--Those individuals who are listed by Price Waterhouse as having been assigned from EIC to projects shall be returned from projects to form a separate EIC pool. Two volunteer committees have been formed to represent this solution. One committee is constituted by EIC-listed individuals who wish to be returned to EIC status. The second committee is constituted by non-EIC lenders who favor the return of EIC-listed individuals to an all -EIC pool.


Communications, Projects, and Volunteers

-- Volunteer Communications Committe Coordinators:
Wendy Menghi - tel: 929-6003 fax: 924-0629
Erika Inacio - tel: 438-0915
Martje Hartman - tel: 538-6601 fax: 536-6108

1. Website: the ELC and Eron lenders gratefully thank Mark Hoffmann for his valuable and time-consuming work creating our former website at "geocities". Mark reports already logging, without charge, well over 520 hours on behalf of Eron lenders from Oct.'97 to Feb.'98, in addition to incurring numerous incidental costs. At this time Mark is unable to continue on a volunteer basis, but he has generously offered to continue his work at one-half his professional rate, which would result in an hourly charge of $25/hr.-uncontingent upon payment for past work, which misimpression may have been taken from the manner in which the website costs were discussed by Ripley at the April 8 Joint ELC-Project Leaders Meeting , and for which confusion or harm the latter apologizes both to Mark and to Eron lenders. Mark has kindly offered to continue to advise the ELC on ways to save communications costs. The Communications Committee believes his outstanding contributions merit special recognition. Until such time as the ELC's financial condition and committments are stabilized, the ELC will instead use the local PW website (www.eron-pwl.com), which has been updated to a more user-friendly design, and upon which we have been assured an independent section. PW wishes to have its own Eron site, and is charged $75/hr. by the webmaster/designer - which has been an indirect cost to Eron lenders under "fees and disbursements."

Project leaders are invited to post on the new website any project news they wish to communicate in this form. It is most cost-effective to e-mail your message to Mrs. Catherine Palmer at Price Waterhouse. The e-mail address is contact@eron-pwl.com. Please note that you must have a title such as "Project News - Nexus" above the text. You can fax the message to Mrs. Palmer at 688-6128, but she must then have it retyped, at our expense. Alternatively, you can leave with Catherine at PW a computer disk, with information presented in MS Word or Wordperfect. She can then forward your news to the Webmaster. Please send your project information by noon on Friday for posting by the following Monday. Mrs. Palmer's telephone is 669-5087, ext. 241.

2. Database: A comprehensive list of all Eron lenders is currently being developed from two prior databases that have been merged and updated. Already many errors have been corrected. This will be used by the communications committee for direct contact with lenders, and for coordinating communication tasks with Price Waterhouse.

-- Volunteer Director of Information Systems: John Hall, tel: 876-9081 or fax: 876-9082.

3. Direct Communications: Using the database, volunteers will be able to directly communicate with sample sets of Eron lenders in order to obtain preferences, opinions, and information that may be useful to all lenders in their relations with Price Waterhouse, Russell & DuMoulin, and Judge Tysoe.

4. Telephone Tree: We need volunteers! Project leaders, please request your telephone tree leaders to contact Wendy (929-6003), Martje (538-6601), or Erika (438-0485).

5. Project Leaders ~ Project billing taxation: Project leaders are requested to review their respective project billings and itemize any problems they find in a letter to Price Waterhouse, with a copy sent to David Craig, fax: 893-7048.

6. Project Volunteer Committees ~ Liability issues: The ELC and Price Waterhouse are investigating the possibility of applying to Judge Tysoe for an order that would protect volunteer commitee members while the are fulfilling their proper mandate. Frivolous, vexatious , and mischievous liability attacks while pursuing such committee work are a serious concern to these volunteers. Note that as long as a project remains under the trusteeship of Price Waterhouse, any final decisions will be those of Judge Tysoe alone, whose approval will be required for monetary distributions resulting from the work of the project committees and Price Waterhouse. Anyone who objects to that distribution plan has the right to apply to Judge Tysoe with his/her preferred, detailed plan.

7. Mutual Support: The ELC and all Eron lenders gratefully thank all those lenders who have already contributed donations toward our common objectives. Your early help, when mass confusion, fear, and ignorance surrounded us after this disaster struck, allowed all of us as a group to become focused upon how to protect ourselves and how to fight back. The work of the ELC and volunteers is likely to continue for many months, and we need further financial support for incidental disbursements. We are asking those who have not yet contributed $100. to do so now. To date many lenders have not contributed. Important work has been accomplished, notwithstanding the inevitable errors, omissions, political blunders, and general wrangling that are part of any large-scale undertaking in the tense pursuit of financial recovery.

We will send this request for funding by telephone trees and by newsletter (hardcopy and website). Please send a cheque to:
Eron Lenders' Committee
% David Craig
Treasurer, Eron Lenders Committee
#700 - 555 West Hastings Street
Vancouver, B.C. V6B 4N5

Thank you very much for your encouragement and material help.

8. Newsletter: This newsletter is the production of the ELC and volunteer committee members. It will be posted on the website without editing by PW or R&D, who take no responsibility for its contents. Any Eron lender who wishes to suggest ideas or contribute to the preparation of the newsletter is invited to contact Steve Ripley at tel: 222-1646 or fax: 222-1641.

9. Minutes: Minutes of the monthly ELC -Project Leaders meetings are available to all Eron lenders. For a copy please fax Steve Ripley: 222-1641.

-- Volunteer recorder and typist of Minutes: D'Ann Madsen

10. Meetings:

-- May 5, 1998, Tuesday at 7:00 pm: Joint ELC-Project Leaders meeting at the Legion Hall,
4356 East Hastings Street, Burnaby.

-- Attendance at the March 3, 1998, Joint ELC-Project Leaders meeting: 38 projects represented

-- Attendance at the April 7, 1998, Joint ELC-Project Leaders meeting: 43 projects represente




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