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To the Lenders in Project #1141
S.T.E.S. Quadra
November 5, 1997
As indicated in our letter to lenders dated October 22, 1997 we will be providing information to lenders through regular project updates. Unfortunately, due to the poor quality of Eron's accounting and lender records we are presently unable to answer all the questions you may have. However, based on our initial findings we can address the frequently asked questions set out below. We stress that the information available to us is subject to verification and accordingly our findings are subject to change as more information becomes available.
Eron was paying me a good rate of return on my money, why was it closed down?
In many instances payments to lenders were being financed by money received from new lenders or lenders to other projects. Few of Eron's projects were actually producing a return on investment. Our investigations to date indicate that many lenders will incur substantial losses because of these practices. Clearly this situation could not be allowed to continue.
What is the current status of the project?
This is a mortgage over a 404 foot marine vessel known as the STES Quadra.
This vessel was supposed to be towed from Canada to the Cayman Islands. We believe that this vessel is currently in Alameda, California. The mortgage is in default and we are in the process of determining the appropriate course of action to follow.
How much was supposed to be raised for the project?
$770,000 U.S.
According to Eron's records how much was actually raised for the project?
Approximately $1,045,092 CDN and $20,904 U.S.
According to Eron's records how much was advanced to the project?
- Approximately $766,397.04 CDN
- Approximately $ 26,208.46 U.S.
When will you know where my money went?
It will be some time before we are able to account for all funds received by Eron.
What security was taken on the project?
A 1st mortgage in the amount of $770,000.
Are there any mortgages or other loans in priority to the project security?
No
What is the value of the project?
No appraisal of the boat exists in Eron's file. The files contain a survey of the vessel which indicates that the vessel is in poor condition, we are currently seeking more information about the vessel and its value.
Are there any other security or guarantees which might increase recovery on the project?
None
Will I get my money back?
It is too early to tell definitively how much of your money will be recovered. However, at this early stage it appears unlikely that full recovery will be realized.
When will I get any money back?
It is likely to be many months before any money is available to lenders.
We caution you that the information available to us is still incomplete and limited in scope. Nothing in the foregoing should be construed as guaranteeing any return of funds. We will keep you informed on a regular basis and will issue a further project update on or about November 30.
In the meantime if you have any further questions or information concerning the project please contact us in writing at the above noted address or by fax at (604) 688 6128.
Yours truly
Price Waterhouse Limited
Judicial Trustee
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