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Eron Lenders
Project Name: The Fairways at Arrowhead #1163 & #1180
Lender update
May 15, 1998
Further to our letter of January 22, 1998 we are writing to update you on the status of the above noted mortgage.
Project Status
On February 12, 1998, we met with the lenders and outlined our efforts to date with respect to a bulk sale of the condominium project. We had received eight letters of interest to enter into a Purchase and Sale Agreement for the seventy completed and unsold condominium units in addition to the remaining land. We have been dealing with two major issues during the solicitation of offers on the project. The first issue involved the ownership of the owner of the condominiums and the ability to enter into a Purchase and Sale Agreement. The second issue was the status of the first mortgage.
Discussions have been held with the remaining shareholder of the company which owns the condominiums, Dr. Herb Battrum. We have attempted to obtain his co-operation to sell the project to the highest bidder. Even though Price Waterhouse Limited has a 2/3 interest in the company, Dr. Battrum has alleged that PWL cannot sell the project without Dr. Battrum's consent.
We have commenced a foreclosure action to gain possession of the property. This process is expected to take approximately ninety days. We have also initiated a law suit against Dr. Battrum. Once we have control of the property we will conduct a sales process, whereby all interested parties will be asked to submit their best offer and the highest of these offers will be accepted, subject to Court approval.
Throughout the process, we have been in contact with the potential purchasers who are still interested in acquiring the project. Furthermore, three additional potential buyers have come forward and will be included in the sale process.
The first mortgage holder has put the borrower on notice of a non financial default. We are keeping the first mortgage holder up to date on the sale process and the reason for the delay. No foreclosure proceedings have been commenced by the first mortgage holder.
File records indicated the interest reserve on the first mortgage would be used up by the end of April 1998. We have confirmed with the first mortgage holder that the interest reserve is sufficient to carry the mortgage until the end of June 1998.
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.
While 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 current information from PWL in the most cost effective manner we have available.
We plan to issue another letter as soon as we have significant new information with respect to the distribution. 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 Fairways - Project Lead.
Yours truly
Judicial Trustee
Eron Lenders
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