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To the Lenders currently identified in Project #1119
Enterprise Business Park
Borrower: Enterprise Business Park Ltd.
November 10, 1997
As indicated in our letter to lenders dated October 22, 1997 we will be providing information to lenders through regular project updates. Unfortunately, due to the poor quality of Eron's accounting and lender records we are presently unable to answer all the questions you may have. However, based on our initial findings we can address the frequently asked questions set out below. We stress that the information available to us is subject to verification and accordingly our findings are subject to change as more information becomes available.
What is the current status of the project ?
The project is a commercial building in Victoria. It is mostly leased however the mortgage is one month in arrears.
How much was supposed to be raised for the project ?
$1,000,000
According to Eron's records how much was actually raised for the project ?
The records of Eron indicate that approximately $1,230,726.63 was raised for the Enterprise Business Park project.
According to Eron's records how much was advanced to the project ?
It is unknown at this time as all the advances were not done through the trust account.
What happened to the rest of the money ?
It is unknown at this time as the advances can not be determined. Some of the funds were used by Eron to pay commissions and fees.
When will you know where my money went ?
It will be at least two months before we are able to account for all funds received by Eron.
What security was taken on the project ?
A 3rd mortgage in the amount of $1,000,000.
Are there any mortgages or other loans in priority to the project security ?
The following mortgages appear to have priority:
- A 1st mortgage held by The Maritime Life Assurance Company in the amount of $3,700,000.
- A 2nd mortgage held by Vector Holdings Ltd. in the amount of $250,000.
What is the value of the project ?
We have commissioned a valuation report of the property, which is to be received by the end of November, we prefer not to speculate on the value, rather we will advise you of the result of this report.
Are there any other security or guarantees which might increase recovery on the project ?
No, the underlying property would appear to be the only source of recovery.
Will I get my money back ?
It is too early to tell definitively how much of your money will be recovered. However, at this early stage it appears unlikely that full recovery will be realized.
When will I get any money back ?
It is likely to be many months before any money is available to lenders.
We caution you that the information available to us is still incomplete and limited in scope. Nothing in the foregoing should be construed as guaranteeing any return of funds. We will keep you informed on a regular basis and will issue a further project update on or about November 30.
In the meantime if you have any further questions or information concerning the project please contact us in writing at the above noted address or by fax at (604) 688-6128, clearly marking correspondence as relating to the "Enterprise Business Park project".
Yours truly
Price Waterhouse Limited
Judicial Trustee
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