Project Status

In our last letter to you with respect to Shuswap Falls Development, we indicated that the partially completed recreational vehicle park in Enderby, BC had been listed for sale at $595,000. The contractors who put the services in and were not paid by the former owners offered to purchase the property for $200,000, otherwise no other offers were received.

On April 29, 1999, the list price was reduced to $498,000. Still no offers were received.
The list price was dropped to $350,000 on January 4, 2000 following an independent assessment of local market conditions, the state of development and probable deterioration
of the existing services on the property, and discussion with the Lender Lead for the
Shuswap project. A conditional offer was received on March 3, 2000 for $180,000 but the potential purchaser would go no higher. Several more conditional offers were received
from late March 2000 through May 2000. Counter offers brought the price up to the
$300,000 range, but in all cases the purchaser could not remove his conditions.

On November 13, 2000, an offer of $299,000 was received which the Judicial Trustee countered and was accepted at $300,000, subject to the buyer arranging financing. The financing condition was removed on December 8, 2000 and the sale closed on January 26,
2001.

Proceeds of $286,948 net of real estate commissions were received on February 2, 2001 and are being held in an interest bearing trust account pending an application to the court to approve distribution.

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 you need information on reclaiming tax on interest income in prior years, please call David Craig at (604) 713-6680.

Yours truly,

Judicial Trustee