FW: RE: Breckenridge email revised

----- This is a forwarded message ----------------------------------------
From: "Ken Tessis" <ktessis@soberman.com>
To: terry@reiber.ca
Received: 3/22/2010 5:09:58 PM
Subject: RE: Breckenridge email revised

1. Did that amount include the loans ?
2. you also have to add interest and costs etc since then etc
3. we also need you ( the creditor) to value the security in each file - I calculate it at about $73,000 per unit owing with a expected realization value of about $ 42,000 per unit (depending on the priority of the condo fees and loan ) - (if they follow the plan to sell off all the units work it out. )
4. That in turn would give a "good " vote to the second - and if there is another creditor (Canlighthall) voting "yes " they should have control.

We are working on the draft proposals
Regards
______________________________________________________
Kenneth M. Tessis CA*CIRP
Soberman Inc.
T: 416.963.7120

P Please consider the environment before printing this email.

-----Original Message-----
From: Terry Reiber [mailto:terry@reiber.ca]
Sent: Monday, March 22, 2010 5:00 PM
To: Ken Tessis; Paul Ivany
Subject: Re: Breckenridge email revised

I sent you copies of our notices of sale for both seconds. After adding interest etc. Is that not enough for proof of claim?
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Terrence S. Reiber, B.A., LLB., LL.M.
Barrister & Solicitor
T.S. Reiber Professional Corporation
1110 Sheppard Avenue East, Suite 211,
Toronto, Ontario, M2K 2W2

Tel: 416-927-9841 Fax: 416-975-1531
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-----Original Message-----
From: Ken Tessis <ktessis@soberman.com>
Date: Mon, 22 Mar 2010 16:12:26
To: 'Terrence S. Reiber'<terry@reiber.ca>
Cc: Evelyn Bowles<ebowles@soberman.com>; 'H. Paul Ivany'<pivany@compasswealth.com>
Subject: RE: Breckenridge email revised

Thank you for the prompt reply
And my comments back ---
As per same numbers
2. (i) how would that affect validity of third ?
(ii) we will need a proof of claim from the seconds -in each file - with a detailed (a summary will be fine for proof of claim purposes - but all back up should be available ) accounting to show the balance due less the "value " they claim their security is worth - so that the shortfall will be their unsecured claim that they will vote for - which is roughly 1.6 Million maximum (jointly on the 41 units ) out of their total claim of about 3.0 Million - as we have "calculated it to be) - if those
3. The issue will be that of (i) voting Re corporate debt if it is valid and (ii) being a creditor of Young -personally guarantee -
7. I would agree - but the second may have to "account" at the end of the day -If it ever gets that far it will be a "legal" issue if the way the properties were managed is an "acceptable" method for a mortgagee in possession
8. We will deal with the owners and their lawyers directly

Regards

______________________________________________________
Kenneth M. Tessis CA*CIRP
Soberman Inc.
T: 416.963.7120

P Please consider the environment before printing this email.
From: Terrence S. Reiber [mailto:terry@reiber.ca]
Sent: Monday, March 22, 2010 3:21 PM
To: Ken Tessis; 'H. Paul Ivany'
Cc: Evelyn Bowles
Subject: RE: Breckenridge email revised

I have only been representing the 2nd mortgagees.
Ken - My answers are according to your numbers.

1. This loan was not done through me. Canlight has set it up. If the funds advanced were from the 2nd mortgagees for improvements then they should be added to the 2nd mortgages. If the funds were not advanced from the 2nd mortgagees then they are unsecured as no mortgage was registered. As the funds did not flow through my office for the loans I cannot give an opinion as to their nature.

2. We have nothing to do with the 3rd mortgage. I am told it is a VTB which was assigned to a 3rd party likely at a discount. We were not informed that 3rds were being registered and their registration is in contravention of our mortgage terms. At the time we placed the 2nds we did not give consent to any third mortgages.

3. Have no idea about the Evans lawsuit. Have never seen the St. Of Claim. The defendant likely does not have any assets to satisfy any judgment in any event.

4. See above

5. No Idea

6. Not our issue

7. Evans is in arrears and has no say how the 2nd manages the project. I expect that if someone wanted to do an accounting that it could be done but you need to deal with Canlight Hall the project manager.

8. I am not instructed
17. Paul will need to confirm who funded your retainer.

Please note our address change and amend your records accordingly.

This e-mail was sent by:

Terrence S. Reiber, B.A., LLB., LL.M.
Barrister & Solicitor
T.S. Reiber Professional Corporation
1110 Sheppard Avenue East, Suite 211,
Toronto, Ontario, M2K 2W2

Tel: 416-927-9841 Fax: 416-975-1531
E-mail: terry@reiber.ca<mailto:terry@reiber.ca>
Website: www.reiber.ca

THIS E-MAIL MAY BE SOLICITOR CLIENT PRIVILEGED AND MAY CONTAIN CONFIDENTIAL INFORMATON INTENDED ONLY FOR THE PERSON(S) NAMED ABOVE. ANY OTHER DISTRIBUTION, DUPLICATION, OR DISCLOSURE IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS E-MAIL IN ERROR, PLEASE NOTIFY THE SENDER IMMEDIATELY BY TELEPHONE AND DELETE THE ORGINAL TRANSMISSION WITHOUT MAKING A COPY.

From: Ken Tessis [mailto:ktessis@soberman.com]
Sent: March-22-10 2:41 PM
To: 'H. Paul Ivany'; terry@reiber.ca
Cc: Evelyn Bowles
Subject: FW: Breckenridge email revised

A few issues that we need to get resolved ASAP -

1. Please explain again about the loan & how this was set up to maintain priority position etc and how the accounting has been done ( although this should not affect the shortfall to the second at the end of the day) -

2. Also explain again the third mortgage - original amount that it was suppose to be, when and how was it to be repaid, and what happened - ?

3. Basis of Evans suing the third & all the others - we note that Baker not included in the style of cause as a defendant - please advise if claim was assigned or Baker added to the matter

4. Have you two seen the Evan's claim against & defence and counter claim of Carmen et al - as these are assets in both companies ?

5. We understand that the third was personally guaranteed by Evans & Young - and are wondering why Young has not started action against the third et al.?

6. We advised Adler that even if the company goes bankrupt that Evans personally can either buy back the litigation against the third et al from the trustee, or any creditor can pursue the litigation in their own right under s. 38 of the Bankruptcy and Insolvency Act, if the trustee is requested to but does not pursue the litigation

7. Evans, via Adler, also noted their concern about the pooling or pro rata sharing in the past -rental income, expenses and renovations - as they appear to have been done on "pooled basis" which Evans had not agreed to this ( or is this all irrelevant as the second is in control and did it this way)

8. We plan to file proposals - as it will be cheaper than getting extensions (and accomplish what we want to do - get more time to refinance)

9. The proposal will be basically 5 cents on dollar to unsecured paid in 3 years - for now - and the amount can be renegotiated later - but the proposals are really being just to buy time at this stage - the timing is a creditors meeting within 21 days (we are currently trying to accommodate schedules and have tentatively set the meeting for April 13 at 1pm ) and the trustee is required to send a report to all creditors explaining and outlining the proposal and the trustee's findings s to date

10. Therefore the answers in 1 & 2 above will determine what the creditors are listed (which we need to know right away ) this is important - - as the voting rights will be based on what the proven claims are and in what "category" they fall (secured or unsecured) - as fully secured creditors will have no vote

11. Voting by contingent creditors (claims which are not yet crystallized) can vote for amounts as "allowed" by the trustee - or must be litigated

12. The vote as we see it should be controlled by second - as it seems they have at least a million dollar shortfall and can outvote the third - if the third insists on voting as they will have to value their security & vote for their shortfall which could be disallowed by the trustee - (see #10 above )

13. Other creditors voting could / will be lawyers, accountants , Canlighthall and anyone else owed funds by the owner - are you aware of any additional creditors as that may be critical for "dragging this out" longer to provide time to get another mortgage and take out Equitable

14. For the proposals to pass - the voting requires that BOTH (i) over 50% in number of creditors voting and (ii) over 66 .66 % in dollars voting

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