ERON MORTGAGE INFORMATION WEBSITE
THE ERON LENDER COMMITTEE

Eron Lenders Committee Newsletter: December 1, 1998

Capital Recovery: Realization, Distibution, Litigation

1. Taxation of Truteeship & Receivership bills

* On November 13/98 Judge Tysoe heard from J. Grieve (Russell & DuMoulin) the Application of PWC regarding the Judicial Trusteeship's summary taxation of its fees and disbursements to September 30/98 for services to all Eron lenders. He also heard representation from David Fredricksen on behalf of Mr. & Mrs. D. Patriquin, Gordon Johnson on behalf of the ELC and A. Jasich on his own behalf. Judge Tysoe had read affidavits from Craig Bushell, David Craig, Steve Ripley and John Grieve. Judge Tysoe approved the summary taxation in the aggregate amount of $5,706,851.25., which amount will be paid from the general assets of Eron lenders. He further ordered certain qualifications to the Order providing for certain rights of the applicants to return to Court in the future to settle certain undecided issues. For a complete text of the Order please request a copy from Steve Ripley tel.222-1646/ fax 222-1641.

* Ladner Downs' bill - On November 13/98 Judge Tysoe heard (after the abovementioned PWC taxation hearing) the Application respecting two ELC matters: the settlement of the ELC's bill with Ladner Downs, and the settlement of Honorariums for ELC members' work for the past year. Judge Tysoe approved $3400. of the legal bill's payment, and honorariums of $1800./ mo. from July 1/'98 to November 15/98 for Craig and Ripley' Respecting earlier legal charges and earlier-period honorariums [Nov.14/97- Feb.15/09-June30/98], Tysoe ordered PWC to provide to the Court and to A. Jasich an affidavit evaluating the benefits to Eron lenders of the work performed. Thereafter, either Jasich is to consent to the evaluation, or else the matter will be brought before the Court for a Hearing in December. Respecting future honoraria, in response to a comment by Jack Rockandel about the 1998-1999 ELC, Judge Tysoe affirmed that he believed providing continuity of communications for Eron lenders would be useful.


2. Distribution Issues

* The PricewaterhouseCoopers Inc. (PWC) Summary Report On Distribution Issues prepared for the Court and lawyers has been sent to Fredricksen (arguing 'non-pooling') and Hobbs (arguing 'pooling'). The Judicial Trustee (PWC), as the Court appointed Officer of the Court, had been instructed by Judge Tysoe to report without prejudice the factual issues attendant to distribution. Once the lawyers have prepared their arguments a date for an initial Hearing will be set, possibly in December. Further directions from Judge Tysoe may be first sought by the lawyers, depending upon the complexity of the issues discovered. Once the substantive Hearing(s) has occurred Judge Tysoe will issue his Orders on distribution. Thereupon, realized monies may begin to be paid out to Eron lenders - assuming no further legal complications arise.

* The projects that are now confirmed by PWC as realized are: ABC Boat Charters, Homer Street, Morewood, Desert Springs, Gaetz Crossing, Balak, Davie, Crampton, Gallie, Proctor, Wallace, and Ravenswood. A number of other projects are nearing realization.

* Judge Tysoe's dates for Sitting in Vancouver are:
Dec.7-14; Jan.4-15. 25-29; Feb. 8-12; Mar. 1-5


3. Litigation -- Class Action

* This matter will be brought before a Supreme Court judge for determination as to whether or not the case warrants class-action certification. It is hoped that the application will be heard by the early new year. Camp Church has set up an information telephone line: 1 (877) 571-2288. In brief, if the certification is granted, then Eron lenders meeting the criteria of the class will be considered to be a part of the class unless they explicitly, in writing, inform Camp Church they wish to opt out of the class. More details about the procedures will be forthcoming. Currently, Judge Tysoe has been assigned by the Supreme Court as the Case Manager for this certification process. If and when the action is certified, general updates on the litigation process will be available at the websites: www.eron-pwl.com and www.geocities.com/WallStreet/6380


4. Civil and Criminal Litigation

* Civil lawsuits -- PWC continues to formulate its lawsuits against various individuals associated with the Eron fiasco.

* Criminal lawsuits -- Inspector Ard (replacing Malone ), RCMP Commercial Crime Division, has 7 full-time staff members working on the Eron file. The RCMP has now begun their review of information held in PWC files pertinent to their criminal investigations. Once cases are suitably defined by the police (RCMP), the information will be presented to the B.C. Crown Counsel, and it will be the B.C. Attorney General's decision as to how to proceed.


5. Brian Slobogian-- Investigations continue towards civil & criminal lawsuits.


6. Onalee Slobogian-- Confirmation has been received by the ELC that PWC, on behalf of Eron lenders, holds the Duplicate Certificate of Title to 2250 Folkstone Way, West Vancouver. The assessed value of the property presently is $300,000. Depending upon future civil- litigation developments, this property may be realized in favor of Eron lenders.


7. Frank Biller -- Investigations continue towards civil & criminal lawsuits.


8. Frank Biller Bankrupcy -- On December 18/98 the creditors' Inspectors will meet with the Bankruptcy Trustee to discuss new developments regarding Biller's current bankruptcy, discharge hearings for which may come to the Court in March, 1999. The Inspectors will discuss issues that include the implications of the matter mentioned below-see "M. Biller".


9. Michelle Biller-- Mrs. Biller has reportedly changed her mind and has agreed to offer a proposal for settlement respecting who is entitled to the assets of Biller Holdings. PWC will pursue this matter by negotiation or litigation on behalf of Eron lenders.


10. Other Investigations -- James Tindle, the newly elected Chair of the ELC, is working to investigate other information that may prove useful to all Eron lenders in our attempts to recover our $capital. *Important*: contact James with any information you think might further these efforts: tel #438-0915 or fax #738-2795.


11. Revenue Canada

* Craig Bushell of PWC has undertaken to discuss with Revenue Canada the problems pertaining to RIF holders. A determination of the status of their "frozen" assets held in RIF accounts must be made for the tax year 1998.

* The matter of the "crystallization" of Eron lenders' losses for this tax year 1998 will also be addressed by PWC. It appears that , strictly interpreted, crystallization does not occur until monies are actually paid -out from an asset's liquidation, as distinguished from the date at which an asset is sold. No monies are likely to be paid-out from PWC to Eron lenders in 1998.

* Revenue Canada has replied in a letter to PWC of October 20, stating that questions have been referred to the Rulings Directorate in Ottawa.


12. Negotiations with the B.C. Government

* The new ELC will deliberate on the pursuit of negotiations with the B.C. Government about the damages sustained by Eron lenders, and how to protect and prevent B.C. citizens from further such catastrophes. Hobart's office has issued two documents relevant to Eron lenders. The first is a set of "Questions and Answers" discussing the roles, responsibilities, and duties of the administrators of the Mortgage Brokers Act (MBA). The second document states amendments to the MBA that will become effective in 1998. Both documents can be read in their entirety on our website


13. Laurentian Bank --Lenders are being billed for services in their RRSP accounts, despite the fact that no activity has occurred in 1998. Contact Chris Jensen, tel; 691-8800


14. Canadian Western Trust --The company is once again offering to take transfers of RRSP accounts from Laurentian Bank, at special rates. Contact George Mihalopulos: tel:685-2081.


15. B.C. Securities Commission -- A new questionnaire will be sent to Eron lenders by the BCSC. The ELC will request further information from the BCSC before commenting to Eron lenders.


16. Chartered Accountants Institute of British Columbia -- A complaint has been filed against Douglas Reid, an accountant for Eron.


17. Media -- James Tindle, Chair of the new ELC, will coordinate media relations for Eron lenders.

* A letter of appreciation has been sent by Caig and Ripley to David Baines for his work to date elucidating for the public the many intricacies of the $180M dollar disaster caused by the Eron collapse.


18. Letter-Writing Campaign -- We have a good start to the letter-writing campaign, and we encourage those who have not yet done so to take pen in hand and write.


19. Funding -- The ELC, on behalf of all lenders, sincerely thanks those individuals who have contributed various amounts up to $100. We appreciate the financial sacrifices that Eron lenders are making when they so donate. For those lenders who are able to contribute, and who have not yet done so, may we ask your participation. Please recall it has been through the sacrifices of other lenders who have already contributed that the work of your committee this past year has been aided. Send your cheque to:

Eron Lenders Committee
c/o James Tindle, "in trust",
3436 Amberley Place
Vancouver, B.C. V5S 4P9


20. ELC Financials -- David Craig reported the first year financials at the November 15th Annual General Meeting. A copy of the report may be obtained from S. Ripley , tel.222-1646, fax 222-1641.


21. Honorarium-- Please see item #1. Judge Tysoe has ordered a process to settle several undecided segments of the Honorarium Applicaion. This will be concluded in December.


Communications, Projects, Volunteers

22. Project Leaders -* Important* Please remember to distribute to your project members as completely as your committee can the essential information in the newsletter. This is one of your commitments and responsibilities as a leader! This saves all Eron lenders significant $money by informing individuals of a wide range of information that otherwise they may believe they can only obtain by phoning PWC directly--at considerable hourly rate cost to all lenders

* Information provided to Project Leaders at the Dec.1/98 ELC-Projects Meeting: the leaders were given-: Agenda, Annual General Meeting Minutes, Dec.1/98 Newsletter, Laurentian Bank liability analysis (R&D), Justice Tysoe's Orders of Nov.13/98, Justice Low's Order of Oct. 24/97, Justice Loo's Order of Oct. 27/97, Camp Church Update.

* For project leaders who wish to use the website for postings, please telephone /fax/ email Catherine Palmer your information. Preparation of your material will be assisted by our volunteer webmaster, David Jackson, tel #986-3718 or fax #986-6215 or email address www.vanlang.com Catherine Palmer's email address is: contact@eron-pwl.com, to be distinguished from PWC's Eron website,: www.eron-pwl.com

- * Project leaders: updated information re Eron lenders addresses, telephone numbers, fax and email should be sent to our database manager, John Hall, tel #876-9081.,or fax #876-9082.


23. Website -- The Eron website www.eron-pwl.com also functions as our archives. Project leaders, please encourage your members who are unfamiliar with visiting a website to give it a try at a friend's home, at a public library, or at a cybercafe.

* A 'link' will be made from the PWC/ELC website to the geocities website for updates on the class action lawsuit, saving lenders some future $costs, for which help Eron lenders once again have lender Mark Hoffman in Calgary to thank for his already very considerable volunteer effort in 1997-98.

* An attempt will be made to post on the website in a timely manner Orders from the Court when they are available in email format. For those lenders using the internet please recall that you can access written decisions via the B.C. Supreme Court documents website at: www.gov.bc.ca


24. Database -John Hall operates the database, tel #876-9081 or fax #876-9082. Please see item # 22 above re. information updates.


25. Volunteers -- As a result of appeals made through the all-lenders mailing and at the AGM, a number of new volunteers have offered their help -- thank you! And our thanks also to our Volunteers Coordinator, who has done an extraordinary job for Eron lenders during the ELC's first term, and who has fortunately indicated she will continue her volunteer work into the 2nd year: Wendy Menghi , tel: 929-6003, fax 929-6003. Contact Wendy with your questions about how you can get involved with the small, specific, manageable volunteer tasks that will help your fellow lenders, your ELC committee, and yourself!


26. Election Results and ELC Structure

The following individuals have been elected to the 1998-99 ELC: Al Ferris, Erika Inacio, Anthony Jasich, Steve Ripley, Jack Rockandel, Don Smith, and James Tindle. Tindle and Ripley were elected to the 2-person ELC-as selectable by the ballot. The new ELC will be formalizing its priorities in the coming weeks; to date it has changed its structure from a 2-person to a 7-person voting arrangement-similar to the original 1997 ELC.. James Tindle will be the new Chair and Steve Ripley will be the Deputy Chair, working as Communications Coordinator, with General-Secretary and Operations responsibilities. Jack Rockandel will lead the Taxation of Bills committee, and Anthony Jasich will lead the Legal committee. All work, excepting the communications responsibilities, will be undertaken as volunteer contributions. .Ripley will receive an honorarium for so long as his communications work is deemed useful to Eron lenders, as approved by the ELC and the Court. Other ELC positions will be announced shortly. Out-of-pocket expenses of the members, and any legal-counsel fees, will be paid either from lender donations or via Application to the Court for payment from Eron general assets.


27. Annual General Meeting -- The AGM was successfully held Sunday, November 15, 1998, at 12:00 noon at Kitsilano High School Auditorium, 2550 West 10th Avenue, Vancouver. About 400 lenders attended. Minutes of the meeting may be obtained from your Project Leader or from Steve Ripley, tel:222-1646, fax: 222-1641

* A Petition to Premier Glen Clark was signed by Eron lenders attending the AGM- how this will be used has yet to be determined by the new ELC.


28. Postal Communication -- No all-lenders mailing is planned in the immediate future.


29. Calendar/Schedule -- An updated calendar is posted on the website. Please contact Steve Ripley with suggestions for items to be included: tel. #222-2646, fax #222-1641, email: sripley@imag.net


30. Newsletter-- This newsletter is the production of the ELC. It will be posted on the website without editing by PWC 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.


31. Minutes -- Minutes of the monthly ELC-Project Leaders meetings are available to all Eron lenders. For a copy by fax please contact Steve Ripley, tel: 222-1646, fax:222-1541, or else find them posted on the website.


32. Next Meeting: January 5,1999, Tuesday, at 7pm -- ELC-Project Leaders Meeting, Legion Hall, 4356 East Hastings St., Burnaby. For further information regarding Project Leaders' Meetings, contact volunteer, Martje Hartman, tel #538-6601. Martje has served the lenders throughout 1998, and has generously offered to continue her work into the new year.




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