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THE ERON LENDER COMMITTEE

Eron Lenders Committee Newsletter: May 4, 1999

 Judicial Trustee & Receiver: Capital Recovery -- Realization, Distibution, Litigation

1. Realization
* The projects that are now confirmed by PWC as realized or near realization are: ABC Boat Charters, Balak, Capital Place, Castlegar, Crampton, Davie, Desert Springs, Fairways at Arrowhead, Gaetz Crossing, Gallie, Homer Street, Leewood Village, Morewood, Proctor, Ravenswood, Rusin, Wallace.


2. Distribution Issues
* On March 29 PWC recommended to Justice Tysoe a process whereby the remaining distribution questions may be most efficiently and quickly resolved. Tysoe agreed with this process, and in early May PWC will return to Court with its distribution plan. Justice Tysoe will review the plan, and once he is satisfied with its provisions he will order PWC to proceed with the detailed implementation of the distribution. The implementation requires that PWC obtain all lenders' data needed to meet the Revenue Canada refiling criteria, because the distribution will be coordinated with the refiling election. The distribution will proceed on a project by project basis, with the zero-value projects being administered first. The process may be ready to start by June.

* A table has been prepared for the ELC and project leaders by PWC showing the direct and indirect PWC Trusteeship costs to March '99. These sums include the discount negotiated by the ELC on behalf of lenders.


3. PWC Civil Litigation
* A Writ has been filed against the Slobogians for funds owing to EFS, in the amount of $1.2M. The Slobogians have been unforthcoming in response; PWC will pursue this matter by various means.

* PWC continues to investigate the possibility of civil lawsuits against other individuals related to the Eron failure.


4. RCMP Criminal lawsuits
* The RCMP continues its review of information held in PWC files pertinent to their criminal investigations, as well as closely following the evidence presented at the BCSC hearings. Once cases are suitably defined, 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. Tindle has reported that the RCMP may be receiving additional funds specifically intended for its Eron investigations.


5. Brian Slobogian --See # 3 above, and #8 below.


6. Onalee Slobogian
* Mrs. Slobogian applied to Court on her and her husband's behalf to obtain a release of funds from the Mareva Injunction trust, for the purpose of paying retainers to lawyers in anticipation of forthcoming legal bills arising from BCSC investigations and assorted civil litigation. Judge Bauman granted her $125,000. R&D's Mark Andrews successfully won the right to an appeal of this decision, which was issued by Madame Justice Ryan on Feb.18 / 99. A B.C. Appellate Court Hearing date was set for April 15 / 99. On April 15 before the B.C. Appellate Court (Justices Southin, Cummins, and Braidwood ). Mark Andrews successfully argued for a reversal of Justice Bauman's order, with costs of the entire set of hearings being attributable (as per the fees-taxation schedule ) to Mrs. O. Slobogian.


7. Frank Biller --See # 3 above.


8. Frank Biller Bankruptcy --no news to report since the last newsletter.


9. Michelle Biller --no news to report since the last newsletter.


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


11. Revenue Canada
* See the Jan.5 / 99 newsletter and the January all-lenders mailing for introductory comments on the discretionary rulings being provided by Revenue Canada to Eron lenders. At the Feb.2 /99 leaders' and lenders' meeting at the Legion Hall Craig Bushell provided further detailed information to lenders (see the Minutes of the meeting). A series of additional instructions will be communicated to lenders in the coming months to prepare them to take advantage of this administrative provision.

* See the April 6/99 Minutes of the ELC-Projects/ Lenders Meeting for further comments of C. Bushell.

* Revenue Canada form T1135 : Eron lenders participating in U.S.A. / Foreign loans that total over $100,000. are required to complete this form as part of their 1998 Income Tax Return. Obtain the form from your local RevCan office.

* ABIL-PWC now advises all lenders that it is highly unlikely Revenue Canada will permit an ABIL (allowable business investment loss) treatment of Eron lenders' losses, except for those individuals who otherwise in their normal previous filings have had the tax circumstances that justified such claims.

* Do not refile your prior years' returns yourself ; await PWC's instructions ! DO NOT CONTACT REVENUE CANADA ! File your 1998 Income Tax Return normally, as your accountant advises. You will receive no T-5's from PWC in 1999 for the tax year 1998 because no payments were made to you from PWC in 1998 [nor did any 'crystallizations' (payouts) occur in 1998 (as distinguished from 'realizations')]. Please telephone Steve Ripley (222-1646) or David Craig (713-6680) if you have further questions.


12. Laurentian Bank & Canadian Western Trust
* Laurentian has sent a letter to all its Eron RRSP and RIF accounts. CWT has yet to send its letter, because it is not satisfied with the documentation provided by PWC. PWC is attempting to rectify the problem.


13 .BC Securities Commission
* An investigative hearing into the conduct of Slobogian and Biller began April 12 at the Century Plaza Hotel, 1015 Burrard St., Vancouver. The Commission Hearing Panel consists of Ms. Joyce Maykut, Q.C., Mr. Brent Aikten, and Mr. John Graf. Following a schedule that will conclude in June the panel has been hearing the testimony of important witnesses to the Eron disaster. F Biller is attending, represented by his counsel M. Skwarok; B. Slobogian has refused to appear, nor do any lawyers appear for him. Mr.James A. Angus is the lead lawyer for the BCSC. The ELC Chair, Dr. James Tindle, testified at length on behalf of all lenders, and has assiduously attended the hearings and taken notes for future reference. The RCMP is in attendance, and the media is covering the events, which have been reported by David Baines for "The Vancouver Sun"'. Radio (CKNW) and is also present. In mid-May Jamie Engen, formerly supervising the Eron file for PW, will be testifying. Depending upon the findings of the Panel, Slobogian and Biller are potentially liable for various sanctions &/ fines. Were there to be fines, the monies-if realizable- would go to the B.C.Government. For a regularly updated schedule, please contact Ms. Paula Couper, legal secretary to Mr. Angus (899-6626), or Steve Ripley (222-1646).


14. Chartered Accountants' Institute of British Columbia --No news to report.



E.L.C. - Communications, Projects, Volunteers, Class Action Litigation


15. Litigation:Class Action
* Judge Tysoe has been assigned by the Supreme Court as the Case Management Judge for this certification process.

* On March 22 Camp Church obtained an Order from the Court of Appeal requiring the B.C.Government to produce documents from its files over which it had been claiming privilege.

* On Mar. 29 / 99 Justice Tysoe ruled in favor of Eron lenders in the Cause of Action / Claim in Law part of the class action certification ( two-part ) process. On behalf of Eron lenders in general the ELC especially thanks all those lenders who took the time and trouble to attend these Courtroom battles held on Mar.2-3.

* The BC Government has cross-examined Dr. James Tindle, Chair of the Eron Lenders Committee and Mrs. M. Cooper; D.Church and A. Pearson have cross-examined Adrienne Murray, Deputy Registrar of Mortgage Brokers.

* The preliminary application by D. Jackie, to have the third party proceedings brought against him by the Government struck out, was dismissed in written reasons issued by the Court on April 13 / 99.

* The second part of the class action certification process -Class Suitability-- will be heard on **May 12-14.It is important that as many lenders as possible attend on one or more of these days! Please set this time aside in your schedule. This is the single most important Court Hearing in the history of Eron affairs since Oct.3/97!! You can make a difference by your attendance, which visibly demonstrates your concern with the Judicial process.The results of this hearing is of central significance to every Eron lender.

* If the Application for certification is successful, the action will be certified as a class action. Class members will be notified of the certification and of the alternatives available to them as a result of the certification order, in the manner directed by the Court.

* General updates on the litigation process are available at the websites: www.eron-pwl.com and www.geocities.com/WallStreet/6380


16. 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! Recall: 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 the estate assets.

* The following information was provided to Project Leaders and lenders at the May 4 / 99 ELC-Projects & Lenders Meeting: May 4 Agenda, May 4 Newsletter, April 6 / 99 Project Leaders Meeting Minutes, BCSC Schedule, May 12-14 Courtroom-Attendance Commitment Form, letter from the Hon. Lawrence MacAulay to J. Tindle, Website Directory, ERC-ELC Financials

* For project leaders who wish to use the website for postings, please telephone / fax / email your information to Catherine Palmer. 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


17. Letter-Writing Campaign --Eron lenders are continuing to send letters to assorted newspapers, institutional officials and politicians. See no. 17, below: use these newspaper articles as the basis of further letters! For copies, contact S. Ripley at tel.222-1646 / fax 222-1641 Thank you!


18. Media
* James Tindle coordinates media relations for the ELC.

* The Feb. 13 & 16 "Vancouver Sun" carried important articles, the first by David Baines, the second witten by the editors, both of which suggested the B.C. Government / Superintendent of Mortgage Brokers had been negligent in not warning Eron lenders of the risks in dealing with Eron Mortgage Corp., given FICOM's knowledge of Eron's non-compliance record.

* A variety of media staff has been reporting the events at the BCSC hearings.


19. ELC Legal Counsel
* The Ladner Downs bill-payment application first brought to Court on Nov.13/98 by the ELC was heard on March 3/99 by Justice Tysoe, who ordered that the bill be paid, but with a discount. As a result of a discount of $1000., LD was paid $ 17,000.


20. Honorarium
* Please see item #19. After reviewing the affidavits of C.Bushell, A. Jasich, I.Wragge, S.Ripley and D.Craig, and hearing the presentations of Jasich and Ripley in Court, Justice Tysoe ordered on March 3/99 that honorariums for past work be awarded to the ELC: J. McDermott received $6853., I.Wragge $6853., R.Dominick $$2502., S.Ripley$18872, D.Craig $19460. Likewise, for contemporary work, Ripley was awarded an honorarium of $1800. / mo., as applied for in a separate affidavit. His responsibilities are: Deputy Chair, General Secretary, Head of Communications, and Operations Manager.


21. ELC Funding
* The ELC, on behalf of all lenders, gratefully thanks those individuals who have contributed various amounts up to $100. 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 is enabled. Please send your cheque to the ELC Treasurer:

Eron Lenders Committee
c/o Anthony Jasich, "in trust",
4725 Glenwood Ave.
North Vancouver, B.C.V7R 4G6


22. ELC Treasurer's Report --The ERC-ELC Consolidated Income Statement for Oct.3/97-Nov./98 has been issued. For a copy, please phone S. Ripley (222-1646) / fax (222-1641).


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 try it at a friend's home, at a public library, or at a cybercafe.

* A 'link' has been made from the PWC/ELC website to the geocities website for updates on the class action lawsuit. See item # 15, above.

* 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 send John your changes re. address, telephone, fax, email, name, Eron beneficiaries, or deceased Eron lenders.


25. Volunteers --Contact Wendy Menghi (Tel: 929-6003, fax 924-0629) 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! THANK YOU!


26. ELC Administration --The ELC invites any lender who may contemplate applying for the open position on the ELC to contact an ELC member for further information.


27. Postal Communication --The last all-lenders mailing occurred in March from PWC regarding Distribution matters. Others will be forthcoming in May &/ June regarding Revenue Canada options, and Distribution matters.


28. Calendar / Schedule -- An updated calendar to June / 99 is posted on the website. Please contact Steve Ripley with suggestions for items to be included: tel. #222-1646, fax #222-1641, email: sripley@imag.net.


29. 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 (tel. 222-1646, fax 222-1641).


30. Minutes -- Minutes of the monthly ELC-Project Leaders & Lenders meetings are available to all Eron lenders. For a copy by fax please contact Steve Ripley, Tel: 222-1646, fax: 222-1641, or else find them posted on the website.


31. Next Meeting June1,1999, Tuesday, at 7pm -- ELC-Project Leaders and all lenders meeting, Royal Canadian Legion Hall # 148, 4356 East Hastings St., Burnaby.For further information regarding meetings, contact Martje Hartman, Tel #538-6601; also, see the ELC calendar on the website.




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