On July 15th, James Weissenborn (“Jimmy“), the Chief Restructuring Officer of RE Loans and the Managing Partner of Mackinac Partners wrote a letter to RE Loans noteholders. If you haven’t seen the letter, check out the RE Loans website (recent news section) and look under Mackinac Correspondence. Click on the link for “Message from Chief Restructuring Officer (CRO)”. Now, onto the response…
Thank you for reaching out (over a month ago). It feels good to hear from someone at the C level. Quite a title bestowed upon you. I bet Barney is pissed. He never got such a fancy title, did he? Anyway, let’s move on to the reason I’m writing you…your most recent communication with the noteholders of RE Loans. You mention in your letter of July 15, 2010 that RE Loans is “operating under a series of forbearance agreements with Wells Fargo.” You go on to state that the “note matures” at the end of July.
Today happens to be August 26th, about a month after the maturation of the note. We haven’t heard a peep from you, so should we presume all’s well with Wells Fargo Foothill (“WFF”) or should we presume the worst? Did you extend “the facility” or are you preparing to file for Chapter 11?
Inquiring minds want to know.
It’s actually pretty inconsiderate to tell everyone that the world could blow up at the end of July – if it hasn’t blown up already – and then fail to communicate at month’s end.
You also mention a business plan. It’s probably the first time RE Loans has had an actual business plan. I can only suspect that a business plan might affect us (the subordinated, former investors turned noteholders). It would be really cool to actually see the document. Given the fact that there has been very little exchange of actual information since we watched our investments disappear like a poor magic trick performed by a B level magician booked to perform at the Siena Hotel & Casino, it sure would be refreshing for someone like you to share with us just exactly WHAT is going on.
I have a few questions for you, Jimmy, as follows:
What does this statement mean?
“Provide for the significant liquidity and infrastructure we need to support these assets.”
I take it to mean you are running an operation with a monstrous overhead. Between your monthly nut, The Dishnica Group’s retainer, Walter, Kelly and the office staff salaries (Susie Parker, et al), that sounds pretty significant to me. How much are we talking here?
You go on to state that, “As details emerge, I will update you on our progress with respect to these discussions and other matters of significance.” It must be safe to assume that no details have emerged and nothing significant has happened for over a month. Am I right?
You write, “In my last two communications we discussed the critical need for liquidity.” I understand how you feel, Jimmy. I too have a critical need for liquidity. Help me out here if you could. Do you have any idea how critical liquidity is for the noteholders, many of whom have relied upon interest payments to fund their retirement?
It would be truly magical to see the asset status reports your people are putting together. What do you say, Jimmy? Feel like sharing? How about the title/lien and loan documentation papers, too, while you’re at it?
Thanks, Jimmy. I appreciate your time and your responsiveness. Thank you for your tireless pursuits on behalf of WFF, B-4 Partners and yourself the RE Loans noteholders. We’ll never forget what you’ve done for us.