|
|
Post by disappointedinvestor on Dec 18, 2019 16:46:24 GMT
Changes at the top were announced in the Reorganization Plan sent to Investors one year ago: "It our intention to hire a new Chief Executive Officer/Chief Operating Officer (CEO/COO), with extensive experience in the mortgage industry, to take HMIC forward in the future."
Since then it was determined that it is unlikely that Larry Dunn and Tim Dwyer will remain with HE more than 2-3 years. Although it does not have any succession plan, HE is seeking Investors' approval to wind-up the MIC into a Trust that would have like the top two executives Larry Dunn and Tim Dwyer.
|
|
|
|
Post by nemesis on Dec 18, 2019 17:23:09 GMT
Our real and immediate problem is not what CEO is supposedly going to take over the reigns in a few years - one with 'mortgage experience'.
The immediate problem is how to deal with the fallout from the 36 properties that the company had to take over when the mortgages failed.
Management presents themselves as 'developers' with the capability of preparing these properties for market when they are no such thing.
Why we would allow the same guys who dug the hole to fill it in again is beyond my understanding. And with less restraints than the current MIC
provides.
|
|
|
|
Post by Moderator on Dec 18, 2019 20:02:27 GMT
disappointedinvestor Your poll points out to an interesting question: why do they spend time and money (Investors' money) on the reorganization of a company they will soon leave, instead of selling the HRAC properties? Why is HE management so determined to complete this reorg and to hold on properties? What are their real reasons?
|
|
|
|
Post by rationalinvestor on Dec 18, 2019 20:30:33 GMT
As I understood the goals for original design for the reorg — splitting the fund into two parts — was to get the flexibility to: - Put the performing assets into one clean fund. That fund would have have given us a decent return and perhaps some liquidity, especially if they could start to attract new investors to the clean fund that pays a decent return
- Put the non-performing assets into a fund that would be whittled down over time, providing no dividend but would pay out the cash over time as it's worked down. With management having a significant investment of their own in this second fund (thats what they said; need to confirm), they're motivated to maximize the value they get from it
That seemed pretty logical to me. Yes, it sucks that there are a lot of non-performing assets so we take a haircut. But we could have been making some progress and maximizing the value.
Instead, they've been hamstrung and unable to operate as a going concern for several years. It's no surprise that our position has gotten worse over this extended time.
Perhaps I misunderstood the benefits of the reorg?
|
|
|
|
Post by nemesis on Dec 18, 2019 22:04:57 GMT
You could, as you say, put the performing assets (the mortgages) into one fund. You could hope to attract new investors, but
I would say that is a very faint hope indeed. Who would invest in fund that has performed so poorly over the last 4 years.
It is entirely unclear to me which mortgages would continue to 'perform' over the coming years and how many would become
impaired. There is a long history of mortgage impairment here over the past four years.
With regard to the non-performing assets (the real estate) the investors have no clear understanding of the properties -what it
would take to bring them up to speed, how long would it take (probably a decade) to actually develop them, what the actual market value of them is currently.
And who would undertake the work of development moving forward? I do not believe the current management group has the staff nor expertise
to work this out.
Investors did NOT sign up to be part of a real estate development company.
And, as I have stated previously, it is my belief that management is not heavily invested in the MIC.
The reason management wants to change the MIC into a trust is because there would be very little oversight with regard to the real estate fund.
As one lawyer put it - you are in effect turning over your capital to them to do with as they see fit. That requires a very high level of trust.
The ELO was a haircut (15%). I think we are looking a head shave.
|
|
