|
|
|
Eron Fairways Investor Report
To the Lenders Currently Identified in Project #1180
Fairways at Arrowhead Ranch (the "Fairways")
Borrower: 494597 BC Ltd.
November 19, 1997
As indicated in our October 22, 1997 letter to lenders, we will be providing information to lenders through regular project updates. Unfortunately, due to the poor quality of Eron Mortgage Corporation's ("Eron") accounting and lender records, we are presently unable to answer all of the questions that 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 Fairways, located in Glendale, Arizona, was a planned 182 unit condominium complex, to be configured in eight-plex buildings. To-date 72 of the condominium units have been completed, and two units have been sold. The net proceeds of these sales were used for debt servicing and partial payment of amounts owed to the unpaid general contractor. The contractor is owed a further $300,000, with other creditors owed in excess of $100,000.
The remaining units continue to be listed for sale, however we have been preliminarily advised that while the units are of a high quality, the selling prices may be excessive on a per square foot basis when compared to other local developments.
How much was supposed to be raised for the Project?
We understand that the Eron mortgage is in the principal amount of $7,500,000.
According to Eron's records how much was actually raised for the project?
The records of Eron are incomplete. However, based on information available to-date, the amount raised by Eron for the Fairways project appears to be approximately $16,000,000.
According to Eron's records how much was advanced to the project?
The records of Eron are incomplete. However, based on information available to-date, the amount invested by Eron appears to approximate $14,000,000.
What happened to the rest of the money?
We do not know at this stage.
What security was taken on the Project?
We understand that Eron has a mortgage in the principal amount of $7,500,000. We are in the process of reviewing the security documentation with legal counsel to determine the enforceability of this mortgage.
Are there any mortgages or other loans in priority to the project security?
It is our preliminary understanding that an Arizona financial institution holds a first mortgage in priority to Eron in the amount of $3,000,000.
What is the value of the project?
We do not know at this point. We have commissioned a valuation report on the property that should be completed by November 30, 1997.
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 investors.
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, 1997.
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 your correspondence as relating to the "Fairways project".
Yours truly
Price Waterhouse Limited
Judicial Trustee
BACK
|
|
|