ERON INVESTOR PHONE LINE
Response to March 7, 2001 ELC Recording

 From the recording of March 7, 2001:

Quote from the Eron Investor Phone Line:"At this time, we have not heard of any lender receiving a tax rebate from Revenue Canada for taxes paid on interest from Eron loans that was later deemed to be a return of capital by Justice Tysoe. … It is hard to believe that the Judicial Trustee has not been able to finalize this issue for the past two years. What could be the reason for such a lengthy delay?… Can we attribute this lengthy and unnecessary delay on incompetence on the part of the parties involved? Or is this simply a method of allowing the Judicial Trustee to claim that much is still being done on the Eron file..."


Response from PricewaterhouseCoopers Inc.:

Firstly, we report that to date, an initial 44 re-assessment refunds have been mailed to Eron lenders. CCRA has indicated that the process of producing cheques has just started and will now gather momentum.

From day one, the entire re-filing process has been done in conjunction with the co-operation of CCRA (formerly Revenue Canada), David Craig (Eron Lender Representative) and PricewaterhouseCoopers Inc.

The CCRA initiated the processes, and have continually defined and re-defined the procedures. They have always provided us with excellent information, and their rulings have been most beneficial to the Eron lenders.

David Craig, a fellow Eron lender, has assisted over 1500 lenders and hundreds of their accountants and financial advisors to date with their tax process questions, at no cost to the lenders. David has spent considerable time in contacting non-responding lenders to explain the re-filing opportunity, and to get their participation in this special process.


IF YOU HAVE ANY QUESTIONS ABOUT THE TAX RE-FILING PROCESS PLEASE CALL DAVID CRAIG (604) 713-6680

PricewaterhouseCoopers Inc. took the initiative to improve the re-filing process for the Eron lenders. We were able to obtain rulings from the CCRA that 16 projects will qualify for an ABIL (Allowable Business Investment Loss) treatment. The ABIL treatment is worth many millions of dollars to the Eron lenders. As well, we have provided hundreds of Eron lenders with information, verbal and written, to assist them with their tax re-filings.

The time taken to complete the re-filing process over the last 12 months is largely out of our hands. CCRA has required extra time to deal with archived files and to get the refund calculations correct. This extra time has been necessary in part because the periods for which we are re-filing are statutorily bared.

A timetable of all projects submitted to date to CCRA is shown below. As indicated, some of the response percentages are low for some projects and time has been invested in contacting these lenders to explain this financially advantageous opportunity.


Mortgage #

Project Name

No. of active CASH Lenders

Round One mailing date to lenders

Return of Capital response

Capital Loss response

Initial submission to CCRA

1142

1107 Pacific Drive 2nd - $250,000

1

Mar 29/00

0%

0%

n/a

1143

1107 Pacific Drive 3rd - $90,000

2

Mar 29/00

100%

50%

Jul 13/00

1144

1107 Pacific Drive 4th - $65,000

1

Mar 29/00

0%

0%

n/a

1175

570 Dunsmuir

238

Mar 29/00

46%

13%

Jul 13/00

1201

Angel Care 2nd

33

May 19/00

48%

12%

Jul 13/00

1202

Angel Care 3rd

8

Mar 29/00

50%

13%

Jul 13/00

1118

Balak, Lee

5

Mar 29/00

20%

0%

Jul 13/00

1164

Caesars Landing

113

Mar 29/00

56%

10%

Jul 13/00

4004

Capital Productions Inc - $5,000,000

6

Jan 15/01

21%

0%

Feb 23/01

4005

Capital Productions Inc - $6,000,000

26

Jan 15/01

"

ﾒ

Feb 23/01

4015

Capital Productions Inc - $5,000,000

1

Jan 15/01

ﾒ

ﾒ

Feb 23/01

1133

Cloverdale Mall 2nd - $1,250,000

30

Sept 8/99

50%

3%

Jul 13/00

1135

Cloverdale Mall 3rd - $400,000

2

Sept 8/99

"

"

"

1155

Commonwealth

13

Sept 8/99

46%

46%

Jul 13/00

1106

Commonwealth

0

Sept 8/99

"

"

"

1100

Davie, Blake

7

Mar 29/00

71%

29%

Jul 13/00

1176

Desert Springs Holdings LLC

66

June 5/00

32%

12%

Jul 13/00

1127

Emerald Estates 2nd - $550,000

1

May 19/00

100%

0%

Jul 13/00

1128

Emerald Estates 3rd - $2,011,000

27

May 19/00

70%

11%

Jul 13/00

1129

Emerald Estates 4th - $500,000

8

Feb 15/00

50%

0%

Jul 13/00

1131

Emerald Estates 5th $3,550,000

62

Feb 15/00

44%

15%

Jul 13/00

1132

Emerald Estates 6th - $2,500,000

169

Feb 15/00

43%

15%

Jul 13/00

1119

Enterprise Business Park Ltd

20

May 19/00

65%

10%

Jul 13/00

4006

Eron Financial Services

45

Jan 15/01

49%

0%

Feb 23/01

1130

Eron Investment Corp (includes US)

472

Jan 15/01

47%

0%

Feb 23/01

1109

Everbrite Ventures 2nd - $375,000

5

May 19/00

80%

30%

Jul 13/00

1174

Everbrite Ventures 3rd

2

May 19/00

"

"

"

1208

Everbrite Ventures 4th

3

May 19/00

"

"

"

1163

Fairways (Arrowhead) - $7,500,000

425

Mar 29/00

48%

11%

Aug 23/00

1193

Gaetz Crossing (Red Deer)

39

Jun 5/00

46%

8%

Aug 3/00

Mortgage #

Project Name

No. of active CASH Lenders

Round One mailing date to lenders

Return of Capital response

Capital Loss response

Initial submission to CCRA

1137

Gateway Developments - $20,000,000

361

Mar 29/00

59%

18%

Aug 23/00

1199

Goodridge Peninsula

76

Mar 29/00

45%

4%

Aug 3/00

1166

Grande Prairie Airport - $1,500,000

36

Mar 29/00

58%

0%

Aug 23/00

1196

Leewood Village

4

June 28/00

25%

0%

Aug 3/00

1203

Mariner Ridge 2nd

33

Mar 29/00

48%

18%

Aug 3/00

1138

Marlat Resources 1st - $700,000

18

Mar 29/00

50%

11%

Aug 23/00

1162

Marlat Resources 2nd - $202,902

5

Mar 29/00

40%

0%

Aug 3/00

4024

Maxim Resorts (incl CDN & US)

187

Mar 3/00

64%

10%

Nov 29/00

1189

Morewood Property Development

127

June 5/00

49%

17%

Aug 3/00

1173

Nexus Ventures - $3,500,000

232

Mar 3/00

68%

23%

Aug 23/00

1188

Nexus Ventures - $11,200,000

174

Mar 3/00

60%

18%

Aug 23/00

4001

Nexus Ventures - $3,500,000

29

Mar 3/00

62%

24%

Aug 3/00

1153

Nitinat Subdivision

9

Mar 3/00

78%

11%

Aug 3/00

1145

Paulsen Road

9

Mar 3/00

67%

22%

Aug 3/00

1158

PG Specialty Wood

180

Mar 29/00

58%

17%

Aug 23/00

1159

PG Specialty Wood

44

Mar 29/00

70%

27%

Aug 3/00

1161

Riva Pointe Development

233

Mar 29/00

59%

18%

Aug 3/00

1104

Rusin, George & Sharon 3rd

8

Sept 8/99

94%

24%

Aug 3/00

1103

Rusin, George & Sharon 4th

9

Sept 8/99

"

"

"

1122

Seasons Memorial Park - $6,850,000

146

Sept 25/00

18%

7%

Nov 13/00

1157

Shuswap Falls Developments

87

Mar 29/00

56%

14%

Aug 3/00

1139

South Thompson Inn & Guest Ranch

93

Mar 3/00

59%

12%

Aug 23/00

1177

Southampton/Antigua

52

Sept 13/00

37%

2%

Nov 13/00

1172

Sterling Place

106

Mar 29/00

58%

17%

Aug 23/00

1141

STS Quadra

54

Mar 3/00

50%

20%

Aug 3/00

1146

Ucluelet Property - $3,000,000

87

Sept 8/99

67%

31%

Aug 3/00

1113

USCAN Free Trade Zone 2nd - $300,000

12

May 19/00

42%

42%

Aug 23/00

1187

Valleyview Heights

78

Mar 29/00

54%

10%

Aug 23/00

1170

West Coast Golf Promotions

35

Sept 13/00

49%

17%

Nov 13/00

1186

Wilmington River Development

56

Mar 29/00

50%

7%

Aug 23/00

Mortgage #

Project Name

No. of active CASH Lenders

Round One mailing date to lenders

Return of Capital response

Capital Loss response

Initial submission to CCRA

Total eligible investments

4410




Quote from the Eron Investor Phone Line: "Pricewaterhouse continues to ignore the duly elected Eron Lenders Committee [ELC] having cut off all communication and all flow of information to the ELC since October 6 of last year. … Mr. Bushell continues to make unfounded allegations to the quasi representative group of self-interested Eron persons that he now meets with in regards to issues that tend to undermine the credibility of the ELC or certain members of the ELC. … It is too bad that the Judicial Trustee would not live up to the intent spirit of the Trustee Act..."


Response from PricewaterhouseCoopers Inc.:

Unfortunately, the communication with the elected ELC had deteriorated to such a state in the summer of 2000, that it was impossible to continue on in the same fashion. We sought guidance from the Court, who relieved us of any obligation to provide any information to the ELC, or to seek any input from the ELC where we believed the information would be mis-communicated or seeking input would be counterproductive. We continue to be of the view that information is being mis-communicated and thus we have not continued to provide information to the ELC or sought their input. Indeed, the quotes above show how the ELC continues to mis-communicate.

However, since Judge Tysoe's Order, we have been in communication with a group of several Eron Project Leaders with whom we have had on-going contact throughout the duration of the Judicial Trusteeship. We will continue to communicate with the Eron lenders and Project Leaders where there is a benefit to the Eron lenders as a whole and the projects individually.

To imply that any of these individuals are `self-interested' is unfair, as all have given of their time to assist not only PricewaterhouseCoopers Inc., but also to assist many lenders in understanding the complexities of their various projects.

The Eron Investor Phone Line continues to distribute misleading information about the tax re-filing process underway with CCRA. All Eron lenders are cautioned to check any information on the re-filing process they may have received from that source. David Craig has been involved with all matters concerning the CCRA since the outset. We recommend that any investor who wishes any further tax information contact David at (604) 713-6680.


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