pat
New Member
Posts: 6
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Post by pat on Sept 2, 2020 21:53:43 GMT
The meeting docset aka Information Circular will arrive soon in our mail/e-mail. As some of us cannot afford a lawyer or tax accountant, I hope that those Investors who have the benefit of professional advice can share with the the others their findings
thx and have a good one
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brad1
Full Member
Posts: 39
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Post by brad1 on Sept 5, 2020 20:36:26 GMT
Remember the old paragraph that was the subject of debates on this forum? Well, the contentious part has been scraped.
2019 PLAN: "3.7 Legal Ownership of Trust Assets
The legal ownership of the Trust Assets and the right to manage the investments of the Trust are vested exclusively in the Trustee and the Unitholders shall have no interest therein other than the beneficial interest in the Trust Fund conferred by their Units issued hereunder and they shall have no right to compel any partition, division, distribution or distribution of the Trust Fund or any of the Trust Assets. The Units shall be personal property and shall confer upon the holders thereof only the interest and rights specifically set forth in this Declaration of Trust. No Unitholder has or is deemed to have any right of ownership in any of the Trust Assets, including without limitation the Trust Fund. "
2020 PLAN: "3.7 Legal Ownership of Trust Assets The legal ownership of the Trust Assets and the right to manage the investments of the Trust are vested exclusively in the Trustee and the Unitholders shall have no interest therein other than the beneficial interest in the Trust Fund conferred by their Units issued hereunder and they shall in the Trustee to have and hold for the beneficial ownership and interest of the Unitholders who hold their interest through the Trust Fund and the rights conferred by their Units issued hereunder. A Unitholder will have the rights expressed herein but will have no right to compel any partition, division, distribution or distribution of the Trust Fund or any of the Trust Assets. The Units shall be personal property and shall confer upon the holders thereof only the interest and rights specifically set forth in this Declaration of Trust. No Unitholder has or is deemed to have any right of ownership in any of the Trust Assets, including without limitation the Trust Fund. or distribution of the Trust Fund or any of the Trust Assets all of which shall be governed by the terms of this Declaration of Trust and managed by the Trustee. The Units shall be personal property and shall confer upon the holders thereof the full extent of the interest and rights specifically set forth in this Declaration of Trust."
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Post by Moderator on Sept 5, 2020 20:49:15 GMT
Thank you, pat , for starting this thread. Just in time. Except for dates and details about conducting the meeting/voting, there are not many changes in the new version of the POA. If you already digested the old one (the Information Circular from 2019), you can easily see the changes by using the free PDF Compare tool at Compare PDF files and see the differences
You might also want to review the Investor Letters received last year from InvestorsHE group. In the absence of any substantial change, the analysis is still valid. Spoiler alert: NO change on redemptions, NO clarity on timelines as many of us hoped
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worried
Junior Member
Super worried for my investment in HarbourEdge
Posts: 13
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Post by worried on Sept 8, 2020 19:49:04 GMT
Another huge pdf, little time to read and compare. Did anybody go through? If so, can share?
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Post by Moderator on Sept 8, 2020 20:00:20 GMT
Another huge pdf, little time to read and compare. Did anybody go through? If so, can share? - First, the REDEMPTIONS DID NOT CHANGE at all. HE promise made in March 2020 through the amended Plan “to allocate all remaining residual mortgage maturities proceeds after honoring existing mortgage commitments, towards Class A redemptions, until all Class A redemptions are satisfied, which will substantially repay the current Class A redemptions within 18 months” vanished!
Instead, we have the very same wording and restrictions set on redemptions, i.e. based mainly on issuing new units, capped at $1 mil/month, and suspension at the discretion of the Board!
- Secondly, nothing new about how the real estate assets will be disposed and proceeds distributed to investors (gradually, at the end?); the strategy is one more time a “TBD”
As the new plan is almost identical with the old one, for which the analysis is already done, it was easy enough to complete the gap analysis.
The result: the Letters you've received from last year are still valid.
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pat
New Member
Posts: 6
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Post by pat on Sept 10, 2020 23:57:19 GMT
I just received a notification from my trust, the docset for the meeting is posted on their website; very little time to read and ponder my vote, only 18 days instead of 21 If it was a .pdf why did I receive it on September 10 when Tim Dwyer promised it by September 4?
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chris
Junior Member
Posts: 13
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Post by chris on Sept 11, 2020 22:28:27 GMT
U r lucky, i did not receive anything...
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Post by nemesis on Sept 11, 2020 23:21:23 GMT
I believe that if you did not specifically request a pdf by email, then you would receive it by regular mail. I requested it by mail and have not received it. Some who requested the pdf by email did receive it and it appears that others did not. Let management know.
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brad1
Full Member
Posts: 39
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Post by brad1 on Sept 12, 2020 0:31:20 GMT
The most important points to ponder before you vote:
1. Redemption mechanism of Class A shares (performing assets) is the same like it used to be in the MIC, i.e. based on issuing new shares and subjected to restrictions on $ amount and redemption volume. Please, review "Reasons for Recommendation" on page 10 of the Information Circular:
“A modern format for redemption will be in the Arrangement which will include restrictions on the dollar amount and numbers of redemptions which can be presented and honoured. It is also intended that following completion of the Arrangement that the Trust complete further financings by issuing Class A Units with the proceeds of which it can use to increasing the mortgage pool, allowing a better balancing of mortgage terms and maturities, and the potential for acquiring more significant pools of cash to allow repurchase or redemption of units. Also, the re-issuance of Class A Units can allow Class A Units to be effectively matched, new units to take out existing units, which is a permitted activity properly managed. The intention is to improve both the cash position, and tradability over time by recommencing the offering of Class A Units”.
What happens with the redemption requests if NO NEW money is invested in HE? Waiting, I guess indefinitely, HE Investors are very good at waiting for their funds while being paid lower and lower dividends!
2. There is no word about how the proceeds from disposing the HRAC properties (distressed assets) are distributed to Class B shareholders. After selling each property, a pool of properties or at the very end? What is the commission? With a closed-end fund the gain or loss is only known at the very end when all the properties are sold.
3. There is no disclosure in "Reasons for Recommendation" re: the motivation HE management has for pushing so hard the Trust structure although it doesn't bring any value for Investors. The hidden reason is that the Trust has a proper mechanism to ensure that HE management is properly compensated and is paid the management fee regardless of fund performance
You Have Been Warned!
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Post by Moderator on Sept 13, 2020 15:28:53 GMT
HE should have been clear in their public disclosure and illustrate the impact of the reorganization on your initial investment. Based on the assumptions communicated by HE, we arrived at the following results: 1. The book value of your investment will go down 10%Value of your current investment in MIC
| $100,000 | % investment that will be exchanged with Class A units | 55%
| %investment that will be exchanged with Class B units | 45% | Total number of your Class A units | 55,000
| Total number of your Class B units | 45,000
| Estimated NAV of Class A units at the time of exchange | $0.90 | Estimated NAV of Class B units at the time of exchange
| $0.90 | Value of your investment held in Class A units | $49,500
| Value of your investment held in Class B units | $40,500
| Value of your investment in Trust | $90,000
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2. The best case scenario to redeem all your Class A units (55% of your initial investment) is 3.3 years.
The illustration is based on the volume of redemption requests of $80 million shares communicated by HE and it assumes that the max allowed of $1 million per month is paid to redemptions without interruptions. Your total number of Class A units
| 55,000
| Pro-rata of your redemption request in total requests
| 0.13% | Your redemption amount per month | $1,250
| Number of your Class A units redeemed in one month | 1,389 | Number of months required to redeem all Class A units
| 40 |
3. You should be prepared to wait indefinitely for Class B units to be redeemed and you should be prepared for losses, in some cases large as in the example below:Your total number of Class B units | 45,000 | The book value of your Class B units | $40,500 | Pro-rata of your Class B holdings in total Class B units | 0.0464% | Covehead P.E.I. property NAV | $521,115 | Your share from Covehead property book value | $242 | Selling price for Covehead property | $189,534 | Your actual return from the selling of Covehead property | $88 | Your loss | 64% |
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Post by rationalinvestor on Sept 13, 2020 16:06:06 GMT
An alternate perspective
The value of our investment, like it or not, has already gone down. This just officially reflects it. It’s actually better than I recall last year. Without checking my notes, I recall it was about 16%.
Great 👍. We finally have a path to begin redeeming, unlike the last 4 years.
True. We’ll probably have losses. Could be worse, could be better than the example above, depending on how well HE succeeds at working through the problems. I’m glad they’re motivated to do so, and doing it in an orderly way is the best approach. No certainty on when anything is sold. But that doesn’t mean it won’t happen - it only means it’s hard to predict.
Anyone that thinks this was a risk-free investment should have known better, although I have to agree it worked out a lot worse than I had hoped.
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Post by nemesis on Sept 13, 2020 16:59:52 GMT
Anyone that thinks this was a risk-free investment should have known better, although I have to agree it worked out a lot worse than I had hoped.
I'm not sure anyone thought it was a risk free investment but it certainly had a pretty stellar run for a decade which continued to encourage new investors. They looked at what the fund had been paying out in dividends over many years and concluded that HE must have really known what it was doing. The returns year over year were great....until Westcourt took a hard look at what was really happening with the mortgages and the NAV and decided to advise their investors to divest. Of the top 10 Canadian MICS - HarbourEdge was the only one that lost value from 2014 to 2016. The lack of coherent timely information to stockholders is really the crux of the thing. Should have been the big red flag that most missed. At the end of the day either HE was asleep at the wheel or they deliberately withheld information that would have helped investors with risk assessment.
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Post by thebigshort on Sept 13, 2020 20:50:03 GMT
Great 👍. We finally have a path to begin redeeming, unlike the last 4 years. rationalinvestor , I hate to curb your enthusiasm, but the Moderator's illustration on redemptions, with all due respect, is way too optimistic. HE Reasons for Recommendation make very clear that the pool of cash that would make possible the redemption of Class A units, i.e. max $1 mil / month, is financed by issuing new Class A units. If NO NEW investors are coming in the fund, this illustration will not work.
HE promise made in March this year to pay redemptions from mortgage maturities has been forgotten, the result being that our redemptions will be, for most part, conditioned by issuing new Class A shares. To be blunt, I don't see this happening any time soon. Bottom line: HE will make some payments after the reorganization, but do not expect to redeem all your Class A units in 3.3 years, unless a miracle happens
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Post by rationalinvestor on Sept 13, 2020 21:30:56 GMT
thebigshort nemesis Perhaps true. Anyhow, the key issue is where from here. That’s the main thing I wanted to illuminate.
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pat
New Member
Posts: 6
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Post by pat on Sept 15, 2020 0:45:01 GMT
Perhaps true. Anyhow, the key issue is where from here. That’s the main thing I wanted to illuminate. I browsed the docset and it doesn't seem to have any significant changes for us. My takeaway is that we'll have more of what we had in the last 5 years unless new investors are coming in with their money that would be a game changer as part of that can be used for redemptions. Here is what draw my attention on the first page of the docset, that pretty much clarifies the direction we are going from here:
"We have spent the last months working with Shareholder representatives to clarify aspects of the plan forward and have now obtained the assurance of support for the Arrangement from the vast majority of Shareholders."
Takeaway for All: like it or not, the reorg will pass
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