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Post by Moderator on Mar 24, 2020 19:10:14 GMT
We believe that an orderly wind-up, completed by HarbourEdge in-house (NO receiver, lawyer, or fire sale) is the only truly fair and equal solution for ALL Investors and, in the current economic environment, the ONLY Solution.
Recently, the global economy entered in an unexpected and sudden depression that could last several years. What are the expected consequences on the HMIC business?
- More foreclosures, i.e. real estate assets taken as settlement of debt will more likely increase
- Less business on mortgage side due to slow economic activity, low interest rates, increased competitions from other lenders, including the banks
- Due to low interest rates, investors will more likely not be interested to park their funds in a MIC, but instead will invest in stock market to take advantage of low prices of good stocks
- Real estate market will be slow for a while (months if not years)
In this economic context, the Two Share Plan would block our investment in HMIC with NO liquidity for the foreseeable future:
- Selling HRAC properties (Class B) will have to wait until the real estate market picks up
- No redemptions of Class A as new Investors are not expected to invest their cash in MICs because of the extremely low interest environment
An orderly wind-up would create liquidity from distributing to All Investors the payouts at mortgage maturities; according to HE redemption forecast this will take 2-3 years. It will also give HE time to complete the asset remediation until the real estate market picks up.
Please note, this proposal is not a forced liquidation with fire sale and receivers that would drastically reduce the value of our investment, but it is only taking further the HE Plan by calling for NO new Investors in the fund until the current Investors are getting back their investment.
- HE plan is to wind-up real estate assets and to continue the lending business hoping to attract new Investors and pay redemptions from the new funds, which will not work in the new economic environment of low interests, low dividends
- Our solution asks HE to wind-up not only the real estate portion of our investment (45%) but also the 55% portion representing financial assets by distributing All proceeds at mortgage maturities to All Investors.
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Post by thebigshort on Mar 24, 2020 21:01:54 GMT
It makes sense to me. Waiting to recover the real estate value and then sell class b properties will take years.
Getting some redemptions from the cash paid out by borrowers at mortgage maturities is better than NOTHING
I could buy now bank stock with dividend yield of 7%-8%
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chris
Junior Member
Posts: 13
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Post by chris on Mar 24, 2020 21:16:40 GMT
It makes sense to me. Waiting to recover the real estate value and then sell class b properties will take years. Getting some redemptions from the cash paid out by borrowers at mortgage maturities is better than NOTHING I could buy now bank stock with dividend yield of 7%-8% Whoever has cash these days is lucky. Enbridge is on sale, dividend yearly 9%, and so many other great stocks I don't know if today was the best time to buy, I bet on "not yet", but the crisis will pass and stock market is moving fast back on track. Not HE... Some people might not like the sound of the wind-up, but the opposite of getting back only part of the initial investment is NOT getting it at all. If HE would be reasonable and make an effort, considering the damage they did to our investment already. They owe us big time
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bojo
New Member
I'd rather be dead in ditch than agree to get scammed
Posts: 8
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Post by bojo on Mar 24, 2020 21:19:31 GMT
Love it! Let's petition HE, we can start it on change.org
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brad1
Full Member
Posts: 39
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Post by brad1 on Mar 24, 2020 21:29:10 GMT
Love it! Let's petition HE, we can start it on change.org Why don't we share with HE, they might consider it for a change. They might be worried about who is paying the staff to do the wind-up work, which is reasonable, but we can discuss the compensation.
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Post by maryanne on Mar 24, 2020 21:58:53 GMT
The way I understand it:
- same as HE Two Share plan for HRAC properties: sell and split proceeds proportionally among all investors
- no new mortgages, no new investors; when mortgages mature split the payments proportionally among all investors
It will take a few years to sell the real estate assets (wait for the market to rebound), but for the mortgage payments it should not be more than 3 years.
Since 55% of our investment is in mortgages, will get that part first; then for the remaining 45% blocked in real estate we might need to wait around 5 years. Even with 20% loss for this part we would get 90% of our investment in the end or more if we consider the dividends received during the wind-up. Not so bad!
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Post by disgustedbeyond on Mar 24, 2020 22:23:02 GMT
Larry’s reading all this and pissing himself laughing . Do u not think that it’s occurred to him to simply “ borrow “ the money throw a 50-60% bone out to all of the “eager leavers “ 😂😂. I like that 😂. A new handle for us 😂 take assignment of the shares , and in a year , 2-3 ? Collect the spread . I was hesitant for awhile to map this out but I’m confident it has occurred to them .
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Post by forexloonie on Mar 25, 2020 0:40:35 GMT
Larry’s reading all this and pissing himself laughing . Do u not think that it’s occurred to him to simply “ borrow “ the money throw a 50-60% bone out to all of the “eager leavers “ 😂😂. I like that 😂. A new handle for us 😂 take assignment of the shares , and in a year , 2-3 ? Collect the spread . I was hesitant for awhile to map this out but I’m confident it has occurred to them . I hear you, disgustedbeyond In my humble opinion, Larry is indeed monitoring this forum but he is not always clear what to make out of it. If he could have got rid of complainers, he would have done that long time ago. He tried. Cassels lawyers came up with the plan of arrangement that "threw the bone of 60% or less" to the dissenting investor, "speak now or forever hold your peace" kind of thing. Again, just my opinion, Mr. Dunn will never agree to work hard for the orderly wind-up leading to a 90% recovery of our initial investment, he would keep the Fund locked up, pushing us over the cliff and leaving Investors no other choice than ask the Courts for an Oppression remedy that would likely be a liquidation, which is the end game because Mr Dunn would rather punish everyone than not having it his way
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Post by Moderator on Mar 25, 2020 12:44:35 GMT
Please note, this proposal is not a forced liquidation with fire sale and receivers that would drastically reduce the value of our investment, but it is only taking further the HE Plan by calling for NO new Investors in the fund until the current Investors are getting back their investment.
HE plan is to wind-up real estate assets and to continue the lending business hoping to attract new Investors and pay redemptions from the new funds, which will not work in the new economic environment of low interests, low dividends Our solution asks HE to wind-up not only the real estate portion of our investment (45%) but also the 55% portion representing financial assets by distributing All proceeds at mortgage maturities to All Investors.
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bob
New Member
Posts: 3
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Post by bob on Mar 25, 2020 13:55:11 GMT
It's not just me, two share plan is a partial liquidation on hrac side, no?
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Post by Moderator on Mar 25, 2020 14:51:28 GMT
It's not just me, two share plan is a partial liquidation on hrac side, no? Winding Up is the correct term to use; it means the business takes time to wind up its affairs and distribute the assets to all investors, then at the very end close the company. What HE plans to do with the HRAC is exactly that. The Liquidation is specifically about selling off the company assets in order to pay creditors and then closing the company. We always asked for wind-up not for Liquidation, but HE prefers to label all our plans with this word to discredit us. All we are asking for now is to wind-up not only the HRAC but the HMIC too by not accepting new investors and not renewing mortgages
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Post by nemesis on Mar 25, 2020 18:20:15 GMT
Words matter. As pointed out, there is a big difference between winding up a company and liquidating a company.
First: Management does not take on any new investors to the MIC. (I can't imagine who would think this is a wise investment but....)
Second: Management does not take on any new mortgages.
Thus, the money that is banked as the current mortgages come due is then distributed to all investors. That would be a wind down of the current MIC.
It is not a yard sale where all the assets are thrown on the front lawn on a Saturday afternoon and the vendor takes whatever he can get by 7 p.m. I would assume that HE likes to use the word Liquidation because it makes the whole process seem scary.
As for the real estate assets..... its harder to determine the path forward because I don't believe we are currently dealing with accurate or up-dated information. To a degree the market will determine how much can be realized from the properties that are currently 'market ready'. Personally I think many of those properties were not actually worth their 'stated' value (by HE). So if a property has been acquired for 3M and sells for 1M, is that because the property was never actually worth 3M to begin with? We have to take the 'experts' word for this.
The incredible lack of transparency over years has brought us all to this point....
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Post by maryanne on Mar 26, 2020 0:26:18 GMT
Many investors might skim-through NAV blurb. Don't! This is how we are going to lose more of our capital.
HE estimated NAV at $0.9 / share for Class A (the part of investment in mortgages). Why is that? Wasn't the loss just a technicality due to accounting write downs for the real estate assets that were recorded only on paper, since the real value of the assets is only known when the asset is sold? Isn't the NAV calculated after the split and not before?
Why is the loss from real estate valuations accounting write downs affecting the funds in mortgages?
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Post by thebigshort on Mar 26, 2020 21:09:17 GMT
Many investors might skim-through NAV blurb. Don't! This is how we are going to lose more of our capital. Why is the loss from real estate valuations accounting write downs affecting the funds in mortgages? There are many concerns I have about NAV, like how is going to be calculated for each type of asset and how often. Knowing what kind of Mickey Mouse operation is running in HE offices, my biggest concern is their lack of skill and resources to do this kind of calculations. HE was never able to have a rule based redemption system (or to buy an app to do that). I only see one way to remain calm when your investment is "managed" by these incompetents: don't think about it
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Post by maryanne on Mar 26, 2020 21:57:42 GMT
thebigshort, there are some investors supporting HE management in a passionate way and blaming what they call "minority group" for the fund problems. Maybe they took your advice and not think about it. For them everything would be okay with their investment if the noisy group would let HE managers to do their job. Being in denial works for some
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