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Eron Lenders
Project Name: #1157 - Shuswap Falls Development
WEB/VMX - Box # 2175
Lender update
January 21, 1998
This project is the development of an R.V. Park in the Township of Enderby, BC alongside the Shuswap River. We have a first mortgage on the property with a face value of $2 million. The borrower is Shuswap Falls Development Inc. a company owned by Brian Slobogian and Frank Biller. The mortgage is in default and demands were issued in November. Through our various actions commenced in our capacity as receiver of EMC and EFS against Mr. Slobogian and Mr. Biller, we secured their interests including the shares in Shuswap Falls Development Inc.
The bank account of Shuswap Falls Development Inc. had a balance of approximately $56,000. We were advised by the development engineer that winterization of the property was an absolute and immediate necessity. Winterization costs were $26,000 which were paid from the funds in the operating account for Shuswap Falls Development.
The accounting of funds raised and advances to the borrower, was extremely complicated and has been completed. The sources and uses of funds can be summarized as follows:
- Total Lender funds raised $4,849,661
- Advances to Shuswap $1,667,620
- Fees to brokers, finders, lenders etc. $ 2,841,524
- Advances to other mortgages $ 726,785
- Miscellaneous disbursements $ 6,688
- Total funds distributed $5,242,617
A recent appraisal commissioned indicated the "as is" value of the land with improvements is $564,000. We have some expressions of interest from potential purchasers and other R.V. developers. These expressions are very preliminary in nature. We will advise of developments, if any, as they take place.
We are in the process of determining the estimated cost to complete the R.V. Park, and have also asked for estimates of potential sale prices of the lots to assist in our assessment of recoveries based on completing the project, versus, the sale of the property on an "as is " basis.
Yours truly
Judicial Trustee
Eron Lenders
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