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Eron Lenders
Project Name: Grande Prairie Airport Property
Lender update
October 19, 1999
Further to our letter of April 2, 1998 we are writing to update you on the status of the above noted project.
Project Status
In our last letter to you with respect to the Grande Prairie Airport property we indicated that the land had been listed for sale with an asking price of $2,600,000. This price was based on an opinion of value that the land was worth between $2,320,000 and $2,994,000.
In July 1998, we received a letter from a potential buyer indicating they were considering an offer in the $1,800,000 range. However, no firm offer materialised. In December 1998, an offer of $600,000 was received which was subsequently improved to $1,200,000, but with a due diligence period to October 31, 1999.
An appraisal was obtained in March 1999 which showed a value of $1,350,000. With the support of your lenders committee, the property was relisted with a different agent at a price of $1,590,000. In June 1999 an offer of $1,400,000 was received which was countered at $1,500,000 and accepted by the purchaser to close in August 1999.
The Judicial Trustee has now received $1,431,528 as the net sale proceeds after paying property taxes and commission on the sale. We have made application with Revenue Canada to recover $87,500 of GST, which was paid when the Judicial Trustee exercised the option to purchase the property.
The loan, which was obtained from the Canadian Imperial Bank of Commerce ("CIBC") in the amount of $1,087,178 to purchase the property, has been repaid together with interest of $121,019. The balance of the funds is being held in an interest bearing trust account pending a resolution of the remaining distribution issues. The distribution issues are currently before the court, and the court's response and approval to distribute project funds is not expected much before the end of the year.
Lender Communications
We will continue to communicate directly with all lenders. However, we urge you to take advantage of the web site at http://www.eron-pwl.com for project specific updates as well as related court orders and other general information. If your enquiry is of a general nature, you should contact Steve Ripley at (604) 222-1646. If you need information on reclaiming tax on interest income in prior years, please call David Craig at (604) 713-6680.
Yours truly,
Judicial Trustee
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