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Eron Lenders
Project Name: Petrochemical Building
Lender update
April 2, 1998
Further to our letter dated December 19, 1997, we are writing to provide you with a further update on the status of the above noted mortgage.
Project Status
On March 23, 1998, the Judicial Trustee completed negotiations and entered into an agreement with the borrower, 662354 Alberta Ltd. and the guarantor, 570 Dunsmuir Holdings Ltd. The agreement confirms that the amount owing by the borrower under the mortgage was $1,600,000 as at February 28, 1998. The balance of the mortgage was never advanced to the borrower, and resulting from that, significant lender liability issues were raised by the borrower. The borrower alleged that they were unable to complete renovations and complete a leasing program, which resulted in a loss of lease income. As part of the agreement we have completed the funding of the original mortgage by advancing a further $300,000, to allow for completion of the renovations to the building. In addition, the agreement has resulted in the borrower releasing all claims of lender liability, as a result of the funding shortfall. The entire amount of the loan ($1,900,000) is to be repaid no later than July 1, 1998. At that time the $300,000 just advanced will be repaid, and the balance of $1,600,000 will then be available to cover all costs and be distributed to lenders.
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.
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 the Judicial Trustee 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 Petrochemical Building - Project Lead.
Yours truly
Judicial Trustee
Eron Lenders
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