brad1
Full Member
Posts: 39
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Post by brad1 on May 18, 2020 15:38:31 GMT
Yes the monitize HRAC assets and return monies to HMIC does sound positive ... but this also sounded positive back in May 2019 when the list of assets came up with many for Immediate Sale! ... did not happen. The facts do not support the positive monetization comments ... he is just stalling for time. I looked back to Jan 15-2019 (last ELO payment) to April 30, 2020 (yesterday's HE update). Approx 15.5 months FACTS 1. HRAC book value went from Jan 15-2019 $116,059,000 down to April 30, 2020 $96,032,305 2. in 15 months somewhere between $3.2MM to $7MM of HRAC assets sold (can't verify due to shitty reporting) MY INSIGHTS A. At the pace of selling this will take 10-15 years to sell everything, but we have covid-19 B. in this covid-19 environment, HRAC will acquire assets for bad debt faster then HE can sell NET NET .. if we do nothing, in 24 months I would forecast HE will be 20% MIC and 80% HRAC ... maybe 100% HRAC. IT IS OUR RIGHT FOR .. all HRAC sales and mortgage maturity go directly to redeem shareholders pro-rata on the exit list! Totally agree, captain , the biggest problem we have with HE is the LACK OF ACTION on their side. A variety of deception tactics are employed to buy time, which works for them in so many ways! What happens with our investment during this time is that its value goes down due to mismanagement, self dealings and incompetence; the classic example is the West Covehead, P.E.I. property. From NAV = $570,667 reported on April 30, 2019, NAV went down to $521,115 on June 30, 2019. The lands were in HMIC property from September 2014, but it was only in the last couple of years that the lots were listed for sale. On March 13, 2020 HE reported that all West Covehead lands were sold for a shocking loss of $331,581, i.e. 64% of NAV. As owners of these lands, the Investors deserve a detailed selling report for this property, lot by lot! |
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Post by Moderator on May 20, 2020 0:51:04 GMT
The investor update for April 2020 came out with a change of narrative that I detected at the very end of the report: “HarbourEdge will continue work to monetize all HRAC assets and return those monies to HMIC”. Different words for an older posting on this Forum “Why is HE NOT completing NOW the disposition of the HRAC properties and place the money back in the Fund, resuming the normal activity as a MIC” There is no need for Two Share Plan Are the investors behind this change of narrative that I personally like the same sending us messages from InvestorsHE, i.e. Robert Mitchell? Definitely not the InvestorHE group that was advocating the Two MIC Group vs Two Share Plan, a debate that is history now. Since the Plan of Arrangement defeat last year, HE is shopping for votes to support their reorg plan that is basically slashing our original investment in a MIC with 45%. They were very hostile to the InvestorsHE group advocating the Two MIC Plan, which let us guess that the voting weight of this group was not significant enough to make them sit down with this group at the negotiation table. Using so called "minority group" as a scapegoat for the delays and generally speaking the fund problems was very convenient though. What HE really needs is the biggest shareholder to cast a vote for their plan. Our conclusion is that they are trying to please that shareholder, hence the sudden and significant change in the narrative. The fact that solutions posted on this Forum are used to solve the reorg standoff is very encouraging for everyone contributing to our Forum |
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Post by rationalinvestor on May 22, 2020 12:30:58 GMT
Has it occurred to anyone that if we had gone to the two share structure, the HRAC would already be providing redemptions as assets were sold? Or am I missing something?
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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 May 22, 2020 19:19:56 GMT
rationalinvestor, what you are missing is that HarbourEdge CAN DISTRIBUTE NOW the proceeds from selling HRAC properties to all shareholders pro-rata, i.e. exactly the same as they would have done with ClassB. And they SHOULD do just that. They should also distribute pro-rata all maturity proceeds to all shareholders. New mortgages is obviously a losing business in the new reality and it could be for a long time. Two Share Plan was half baked anyways, it's a blessing that it did not pass, in COVID-19 world it would have been a disaster.
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Post by rationalinvestor on May 22, 2020 19:28:25 GMT
bojo You're correct that they could distribute the proceeds currently, but under the other plan, they would have been required to distribute them. That would have been the plan. And those proceeds would have been distributed tax efficiently as a return of capital instead of normal income, the way it's distributed now. I don't agree that their original plan was half-baked. I do understand that if people didn't trust their intentions, there was absolutely nothing HE could do to convince them otherwise. Anyway, we are where we are.
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Post by maryanne on May 22, 2020 21:06:18 GMT
And those proceeds would have been distributed tax efficiently as a return of capital instead of normal income, the way it's distributed now. , I assume that you mean "dividends" when you say "normal income" as opposite to return of capital that would be the distribution of proceeds. In fact there is no other way for HE to pay monies to us except for dividends from interest for mortgages and redemption that is returning to us the capital paid up when we purchased Class A shares ($1 / share). As long as the capital returned does not exceed your paid up capital, there is no tax event triggered, i.e. you are not paying any tax, e.g. if you have an investment of 100,000 Class A shares and the redemption amount (return of capital) is $100,000 you don't pay any tax simply because $100,000 is your principal. If the capital returned is less than $1/Class A share, which is the likely scenario, you can claim a tax loss against other taxable gains or income, if you have any. This clear scenario based on the quantification of your initial purchase of 100,000 Class A shares at $1/share becomes blurry in Two Share Plan and you’ll not be able to claim a loss even if you would receive 70% NAV on 55% of your investment (New Class A shares) as there will likely be no quantification of the proceeds from your HRAC shares (Class B shares). CRA could consider that the loss on the new Class A shares could possibly be recovered by proceeds from the Class B shares (even though this is unlikely) and therefore your loss on the original investment can’t be claimed as incapable of then being quantified. When my tax accountant looked into the tax consequences of the Two Share Plan his conclusion based on the above rational was that the plan works against me; an important reason for me to vote Against |
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Post by nemesis on May 23, 2020 17:58:02 GMT
Thank You as always MaryAnne for your reasoned response. Its unfortunate that more investors have not reviewed the situation with their own accountants so they can base their decisions on facts rather than HE alternative facts.
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