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Eron Lenders
Project Name: Enterprise Business Park #1119
Lender update
March 16, 1998
Further to our letter dated December 22, 1997, we are writing to provide you with a further update on the status of the above noted mortgage.
Project Status
This project is a 3rd mortgage in the amount of $1,000,000 on a commercial building located within the main industrial area outside of Victoria.
The loan is in default and the Judicial Trustee has, as part of the security under the loan agreement, exercised the assignment of the lease rents. Commencing December 1, 1997 the tenants' rental payments, less building expenses such as B.C. Hydro and maintenance costs, have been received by the Judicial Trustee.
We are applying to the Court for an order that will allow us to distribute part of these net rental receipts to the first mortgage holder, Maritime Life Insurance Co ("Maritime") whose mortgage is also in default. We have been advised by our legal counsel that Maritime is entitled to these receipts. We understand that Maritime has issued a demand letter but has not commenced foreclosure proceedings.
The second mortgage has been stabilized by acquiring it from the mortgagee, Vector Holdings Ltd. The Judicial Trustee now holds an assignment of the mortgage interest.
The Judicial Trustee commenced a foreclosure action and as a result we have been awarded conduct of sale of the Enterprise Building pursuant to our 5th mortgage, a collateral mortgage on another Eron loan. Our objective is to sell the building as soon as possible, taking into consideration the appraised value, and to this extent we are currently preparing a package of information for prospective qualifying purchasers. When this information package has been finalized the property will be advertised for sale. We are hopeful that a sale will be concluded by June or July of this year.
In addition to working closely with representatives of your Lenders' Committee, the Judicial Trustee has kept in close contact with both the tenants of the building and the property manager. We will continue to keep you informed of developments.
Price Waterhouse Fees and Disbursements
We previously advised that there are two components of PWL's fees and disbursements on each individual project, direct costs and an allocation of indirect costs.
At January 31, 1998 the direct fees incurred on this project totaled approximately $26,000. In addition we have incurred legal fees in connection with this project of approximately $3,000.
The Judicial Trustee is unable to estimate the indirect Judicial Trustee fees that will be allocated to Enterprise Business Park as the indirect fees will be allocated to projects based on the level of direct fees incurred on all projects.
Lender Communications
As you are probably aware, we have a web site at http://www.eron-pwl.com. On this site you will find project specific updates as well as related court orders and other general information.
We will continue to communicate directly with all lenders. We urge you to take advantage of the web site so that you can receive first hand information from Price Waterhouse Limited in the most cost effective manner we have available.
We will issue another letter as soon as we have significant new information to report. In the meantime, if you have any specific questions or information concerning the project please contact us in writing at 500 - 1380 Burrard Street, Vancouver, BC, V6Z 2H3 or by fax at (604) 688-6128 marked to the attention of Enterprise Business Park - Project Lead.
Yours truly
Judicial Trustee
Eron Lenders
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