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Post by forexloonie on Dec 16, 2019 22:11:15 GMT
For 48 months now, HarbourEdge locked up our funds by suspending redemptions and slowly but surely is converting our cash into real estate assets.
In my experience the communication with HarbourEdge was very frustrating. For a while they ignored my redemption request; after sending them complaints about the silence treatment, I started receiving responses from their lawyers. I figured that a proper representation for me would be a lawyer that would talk to the HE lawyer, but this is too expensive and my money is blocked in HarbourEdge fund!
What do you think is the most effective way to have our interests, as Investors, represented in the interaction with HarbourEdge?
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Post by disgustedbeyond on Dec 16, 2019 22:28:23 GMT
Do the math . Some 140 ? Disgruntled share holders . Pledge / assign 10,000 shares each . There are some pretty sharp contingency firms out there , even some high profile lawyers that greed alone for the potential of such a high fee would motivate them . Still at this point slightly premature but I see it happening b4 mid 2020
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Post by maryanne on Dec 17, 2019 1:09:04 GMT
This is how HE operates, through lawyers, the only language they speak...
The sooner we understand we need legal representation, the better
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Post by disappointedinvestor on Dec 28, 2019 22:44:06 GMT
It has been one year since HarbourEdge reiterates the same reorganization plan (how many version?) with the objective of creating a sandbox for Larry's passion for real estate development: " Our current HMIC CEO, Larry Dunn, will remain as CEO of HRAC and Chairman of the Board of both HMIC & HRAC but will then be more available to oversee the development and sale of the HRAC properties while giving direction to the additional project managers to be hired." (HMIC Reorganization Plan, Dec 2018) Despite the opposition from a significant part of Investors that do not want to be invested in real estate development (me included), HE is not looking into the reasonable solution, to give these Investors an exit option and to continue the reorganization with the Investors that are okay with being invested in construction development. They hired better lawyers again and again and continue the fight to lockup ALL Investors's funds! After one year we are still in a stand off. When their Plan was defeated in the Shareholder vote I hoped that HE management will do the reasonable thing and come up with an exit option for the Investors that want out of the fund (according to the info on this Forum 80M shares). As the time is passing by and we do not hear anything from HE, except that they are working on another Plan (  ), I do not think we have another solution than hiring litigation lawyers |
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brad1
Full Member
Posts: 39
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Post by brad1 on Dec 31, 2019 16:04:44 GMT
HarbourEdge seems incapable to find a solution that is acceptable to all interested shareholder groups:
- HE directors: want their business to survive
- The Group of Investors requesting to liquidate their position in HE: Opt-Out Investors
- The Group of Investors that want to remain invested in HE and go through reorganization: Opt-In Investors
Here is a possible scenario that would reconcile the interests of these 3 interest groups:
Step 1. Give each Investor the option to sign the Opt-In or Opt-Out Agreement
Step 2. Proceed to split the fund between Opt-Out Investors and Opt-In Investors:
- 2.1. Payout the share of Opt-Out Investors from all maturing mortgage proceeds and continue to reinvest in mortgages the share of the Opt-In Investors
- 2.2. Dispose ALL HRAC properties as soon as possible:
- Hire professional resources for marketing and sales
- Do not invest money in additional development of HRAC properties
- If HE Directors and Opt-In Investors want to invest in construction development of some HRAC properties, they can do so by purchasing those properties
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brad1
Full Member
Posts: 39
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Post by brad1 on Dec 31, 2019 22:03:41 GMT
One of the things management explained to me years ago was that they would often make money on a default, as they would: - get the property at a discount
- complete the development (they have the expertise)
- then sell at a higher price.
That's the plan under normal circumstances to extract maximum value (not to say they've succeeded at this in the past few years)
Presumably, if HE sold the property without #2 completing development, then #3 wouldn't happen
brad1 Can you comment on that? Presumably you feel we're better off stopping at #1 above and selling? Perhaps that's the smartest action, given recent results, but I'm no expert. If not, HE needs funds to complete development.
Honestly, I am shocked that HE management engaged in development activities (“complete the development (they have the expertise)”) that are prohibited for a MC In the Offering Memorandum under “Business Corporation” it is stated that “The only permitted undertaking of a Mortgage Investment Corporation under the Income Tax Act criteria is the investing of its funds and it is specifically prohibited from managing or developing real property.” And Yes, funds are needed to complete the development, hence investment that has different type of risk than a MIC. And finally, Yes, their track record ( ) makes some investors run (in my scenario Opt-Out Investors) |
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Post by rationalinvestor on Dec 31, 2019 22:12:58 GMT
I may be mistaken. It was a conversation from several years ago so I wouldn't place bets on the accuracy of my memory!
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harry
Junior Member
Posts: 15
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Post by harry on Jan 20, 2020 17:03:52 GMT
After reviewing the plan again i have some observations.
Current returns of 4.55% if on only the 55% which are mortgages is a fair return of 7.7%.
If defaults continue on last year's reduction of 33%, how long will it take to get back to the compliance level of 25% held in real estate? If things are going as well as they say, it should not be long. Therefore maybe they should just leave it alone, buckle down and concentrate on getting out of HRAC asap. Every property does not have to be improved to the max.
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chris
Junior Member
Posts: 13
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Post by chris on Jan 20, 2020 21:52:46 GMT
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), I do not think we have another solution than hiring litigation lawyers 
