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Eron Lenders
Project Name: Emerald Estates
Lender update
August 29, 2003
Further to our letter dated October 15, 2001, we are writing to provide you with a further update on the status of the above noted mortgage.
Project Status
In our last letter to you with respect to Emerald Estates, we indicated that the property had been listed with Royal LePage in Courtenay, B.C., on an MLS basis at an asking price of $1.6 million, but no offers had been received.
On February 19, 2002, the Judicial Trustee received an offer of $1.5 million, conditional upon the buyer obtaining water for a development of the Emerald Estates lands from the Comox-Strathcona Region. The offer was extended until June 30, 2002 to allow the buyer time to continue their discussions with the Regional Planning Department for the Region. In July 2002, we were advised by our agent that the buyer would not seek a further extension of his offer as "the buyer became frustrated talking to the Regional Planning Department".
In January 2003, the court awarded judgement for $125,000 in favour of Endeavour Developments Ltd. (Schiels) against Pacific Playground Holdings Ltd. (Nissen), for failing to provide water to Emerald Estates. The court ordered the amount of the judgement be paid through a reduction in the Nissen first mortgage on the Emerald property.
On January 30, 2003, the Emerald Estates Lenders Committee and the Judicial Trustee agreed to reduce the list price of the Emerald lands to $1.3 million.
On February 3, 2003, the Judicial Trustee received a conditional offer of $1.3 million. The offer was conditional upon the buyer conducting a feasibility study, but when the Judicial Trustee tried to tighten up the condition period, the buyer withdrew his offer.
Throughout 2002 and 2003, the Judicial Trustee carried on a dialogue with members of the Comox-Strathcona Regional Board and Planning Department in an attempt to obtain a commitment from the Region to suppy water to the Emerald lands. The Region remained non-committal.
On July 17, 2003, the court granted Pacific Playground Holdings Ltd., as first mortgage holder, Order Absolute or title to the property.
There will be no recovery to the investors in the Emerald Estates mortgages.
Lender Communications
We will continue to communicate directly with all lenders, however, we urge you to take advantage of the web site at http://www.eron-pwl.com for project specific updates as well as related court orders and other general information. If you need information on reclaiming tax on interest income in prior years, please call David Craig at (604) 713-6680.
Yours very truly,
PricewaterhouseCoopers Inc.
Judicial Trustee
Per:
Richard D. Pallen
Vice President
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