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Project News - Nexus
August 27, 1998
This message dated August 27, 1998, is the 7th update from the Nexus Lenders Committee. In July Price Waterhouse merged with Coopers & Lybrand to form the company Price Waterhouse Coopers Inc. Additionally, Jamie Engen has left Price Waterhouse and has been replaced by two individuals, Craig Bushell and Darryl Eddy, who are now heading the Eron receivership. Jim Bissett remains the liaison for the Nexus mortgage.
In July Judge Tysoe ruled in favor of repooling investors back into the Eron Investment Corporation if they were transferred into a project without accompanying funds. This negates the paper transfer of $3.9 million into Nexus from EIC when it was forced to close, resulting in a target of $13.6 million Cdn. to be repaid to Nexus investors. Michael Graye was originally loaned $6.4 million U.S. Price Waterhouse Coopers has given a current valuation of Michael Graye's debt as $11 million Cdn. Additionally, Nexus Ventures has receivables totalling $4 million from Capital Productions, EIC, other Michael Graye loans, Emerald, Balak, and Riva Point loans.
Michael Graye's property in Wailea, Hawaii, has been sold for $850,000 U.S. Nexus Ventures was in a second position. After payout of the first postion, we are left with $83,000 U.S. in equity.
In spite of efforts by members of the Nexus Lenders Committee and especially Steve Ripley, there has been very little information regarding the value of DIVM shares provided to us by Price Waterhouse Coopers. A chronological review of events includes:
- March 23, 1998 - non-performance by Michael Graye of indebtedness to Nexus. The security of 6.3 million shares and 6.3 million warrants of DIVM continues to be held by the Indosuez Bank in Paris despite Michael Graye's attempts to take control of it.
- March 31, 1998 - date of last written correspondence from Jamie Engen to Nexus Lenders Committee. At that time foreclosure proceedings to control the DIVM shares was begun in both Hong Kong and France. At the same time, preliminary assessment of the assets of DIVM was begun in France. The directors of DIVM and various French wineries were approached, but no-one expressed interest in purchasing this control block of shares.
- Repeated inquiries to Jamie Engen in the month of May brought no results.
- In June of 1998, Jamie Engen stated that as part of the foreclosure proceedings in France, a public auction of DIVM shares would occur in the month of July, 1998. On our behalf, Price Waterhouse Coopers would be able to bid up to the level of debt attached to these shares. He also stated that the assets of DIVM may have been overvalued by Michael Graye and it was unlikely that any outside bids would be made.
- On July 27, 1998, after repeated requests for information, members of the Nexus Lenders Committee met with Craig Bushell, Darryl Eddy, and Jim Bissett of Price Waterhouse Coopers. At that point they could not tell us the precise date of the French auction of DIVM shares. The following day they confirmed that the auction was indeed on September 25. We continue to seek information regarding the assets of DIVM, particularly the vineyard, Domaine Belleville, and indebtedness on the property.
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