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Post by nemesis on Dec 16, 2019 18:18:49 GMT
I would like to know how much the senior management actually has invested in the MIC. I suspect not much. But this is a story that they give out time and again - that they also are heavily invested personally in the company so are motivated to protect their own wealth as well. I wonder if they might have personally cashed out on some (a lot) of their own shares with the advance notice they had that a large investor was about to withdraw from the fund. I would like to see a forensic accountant hired to take a look behind the scenes.
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Post by disgustedbeyond on Dec 16, 2019 21:51:59 GMT
A forensic audit would be more revealing with respect to who , how , when all duress acquired properties have been sold in the last 7 years and corporate , personal search’s done on the purchasers .
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Post by forexloonie on Dec 16, 2019 21:54:44 GMT
This story is like any other of their stories: NOT TRUE. They can say anything they want behind the wall of "legal advisers" (guess who is paying them!). If we question anything, we are not getting any answer (the usual) or if we are vocal, we are threatened with "legal action". Any normal company spends significant amounts of money to find out what their customers want / think about them etc. HarbourEdge is one of a kind, it spends significant amounts of money to silence their shareholders! Sooner or later we'll be in Court looking for JUSTICE...
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Post by rationalinvestor on Dec 17, 2019 20:30:04 GMT
nemesis I agree 100%. Here's how I'm hoping things look: - Management has a *very* significant holding in the fund and will disclose it
- They're committed legally to treat their holdings the same way as the rest of the shareholders
- Management also commits to taking zero fees as they work through this mess. That would further convince me our interests are aligned
If the above were true, I'd want to give them a shot to work it out. Management can't give a firm timetable on when they can fully resolve the distressed asset situation but I'd at least know our interests are 100% aligned.That would be satisfactory to me. They're the ones in the best position to fix this. Instead, we have tied them in knots over the past year because we're angry. Way too much energy and cost has gone into dealing with angry shareholders instead of solving the problem. Does anyone agree with my 3 points above? If so, perhaps we can focus on that with management? PS. In my experience, a fire sale by liquidators usually gets terrible results in terms of value. It's by far and away a last resort, IMHO
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Post by maryanne on Dec 17, 2019 21:52:43 GMT
I agree, Atticus, the emotion is bad for Investors. Any kind of emotions and feelings.
The real question here is not if they are trustful or willing to do the best for Investors, but "Is it realistic to expect HE team to pull out the fund from the severe downtrend that is the result of their work?"
There is an interesting thread started by analyst re: the value of HRAC properties that I recommend. Why did the inventory went up in the last 4 years, although they tried to sell. Assets taken as settlement of debt in total assets: 2015: 12.08% 2016: 27.58% 2017: 30.14% 2018: 37.54% 2019: 44.59%
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Post by nemesis on Dec 17, 2019 21:55:20 GMT
So I am pretty confident that management does not have significant personal funds wrapped up in this fund. But you could ask them. As we have already done without any response. That is part of the management 'story'. This fund was set up and 'sold' as a low risk mortgage investment fund. It has become increasingly high risk as the mortgages became impaired and the fund acquired properties where the borrower has not been able to meet its obligations. I believe at last count that there are 36 properties that fall into that category.
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Post by maryanne on Dec 17, 2019 22:10:40 GMT
For me the only important thing is to have business capabilities to recover our investment and to be willing to return the funds to Investors ("show me the money"!)
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Post by captain on Dec 18, 2019 1:20:22 GMT
Based on management's performance to date, I can't make a big investment decision on "blind trust". I need "simple answers" to two important questions to make an investment decision:
#1. Is the remaining mortgage portfolio good quality with minimal/no defaults expected? Has this been independently reviewed? if not let's get it done ASAP! If No, we should consider receivership rather then adding more real estate assets for bad loans every year, unfortunately If Yes, do you have faith in HE ability to "dramatically improve" their risk analysis of new mortgages and new investors to grow and create fund liquidity? 1a) If YES, let them run it, grow it, add investors and get liquidity back 1b) if NO, let's sell the mortgage portfolio to another MIC to get discounted liquidity back to shareholders
#2. Has management produced a revised HRAC plan that prudent and acceptable risk/reward? overall and for each of the ~40 assets? If not, lets get this ASAP! If No, we should consider receivership unfortunately If Yes, do you have faith in HE management ability to run this HRAC real estate dev & mgmt, as well as execute on a 3 year asset sale plan?
I do NOT support the Dec 2018 HRAC document sent by management seemed "maximum return, high risk and long timeline approach". Why would we invest in additional phases of a residential area and build 100 more new homes? I also do NOT want a quick fire sale that is lowest return, but a short timeline. An acceptable HRAC plan would be "recovery return, low risk and low investment approach" to be completed in 3 years. - forecast asset sales for 2020, 2021 and 2022. - financial P&L forecast of small investments (completing a few units) and lease revenue by year 2020, 2021 and 2022 - policy of NO significant investments in real estate, no new phases of real estate investments - policy of how quarterly money disbursement of sale proceeds will be sent to stakeholders
Does this make sense? Agree?
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Post by maryanne on Dec 18, 2019 1:42:17 GMT
It surely makes sense to me
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Post by nemesis on Dec 19, 2019 23:35:55 GMT
We all invested our money willingly, we all knew risks. The anger has only resulted in delaying any solution.
I would have to argue with that. I was sold into this MIC as a low risk fund. Solid, steady - low loan to value. Very low risk of mortgage impairment. That's not what we have now. Of the top ten MICS in Canada this is the only one going south.
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Post by disgustedbeyond on Dec 19, 2019 23:55:00 GMT
“ loan to value 65% max of appraised “ “ we do the appraisals “ IF One defaults we have in-house developers ( Larry ) to improve the property and sell at a profit “ win win . Sound familiar to anyone ? Does this sound like a high risk “ pitch “ ? Numerous conversations w management through the years were absolute positive “ all’s great “ NO Worries . Relax . Any of these cheerleader catch phrases ring a bell ?
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Post by rationalinvestor on Dec 20, 2019 0:04:29 GMT
I’d have to agree that it was pitched to me as a very low risk fund, focused on 1st mortgages in high quality shoulder markets.
But ... and this matters a lot ... it doesn’t matter!
The only issue that matters is where from here. Please focus on that and not about how you feel betrayed, lied to or misled.
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Post by nemesis on Dec 20, 2019 1:31:41 GMT
Please focus on that and not about how you feel betrayed, lied to or misled.
So the question is .... why would I have faith in management that misled (lied, betrayed) me. I want an orderly wind up of this fund. I would like to see a different management team in place to achieve this.
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Post by tycone on Dec 20, 2019 2:50:36 GMT
I absolutely agree with you rationalinvestor and can't see any positive outcome with all the negative response. I was confident enough with Larry and his team to give him the $ to begin with so why should I feel any different now? There are ups and downs with very investment and I think this investment will get straightened out. Everyone knew or at least they should have been made aware by whatever investment advisor of the day that this was definitely not a guaranteed gig. I see no benefit in anger. I agree, Atticus, the emotion is bad for Investors. Any kind of emotions and feelings. The real question here is not if they are trustful or willing to do the best for Investors, but "Is it realistic to expect HE team to pull out the fund from the severe downtrend that is the result of their work?" There is an interesting thread started by analyst re: the value of HRAC properties that I recommend. Why did the inventory went up in the last 4 years, although they tried to sell. Assets taken as settlement of debt in total assets: 2015: 12.08% 2016: 27.58% 2017: 30.14% 2018: 37.54% 2019: 44.59%
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Post by tycone on Dec 20, 2019 3:04:05 GMT
We have all heard these chants before! However, when Greed sets in, and when Management was at the trough, loan to value, preservation of shareholders capital, and fiducial duty all go out the window! Why, the fees where too great to resist, and it was someone else’s money they were playing with! They likely felt and believed that the Flakes they were financing, just might squeak through without defaulting! At least, not as many as they thought, so let’s feast at the trough... I don’t believe they have the know how to develop and complete these defaulted projects. Just look at the struggle they are having at Larry’s golf club.....imagine having to deal with properties in other provinces. Let’s not allow them to loose whatever we have left!
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