When I heard that my miniscule blog got a mention in the Times Columnist, I was pleased.
Fairy Fantasy Land
According to Adam Gant, construction is going to begin on Capital City Centre project in Colwood. “after they get construction financing”. This is complete balderdash. No one in their right mind is going to finance their stinky albatross with two foreclosures on it. No one in their right mind is going to lend money to Adam Gant who was recently quoted in the Cowichan News Leader saying the “legal fees are cheaper than interest.” Lenders make money when the lendees pay their payments in full and on time. Adam Gant via his companies has no respect for lenders and a terrible history of repaying the money he borrows from lenders and investors alike.
National Inquirer Times Columnist… Gant said there is some frustration because the company has to deal with rumours swirling about the future of the project and some of what he calls misinformation being spread online. “This project is a meaningful one for us,” he said, noting it’s one of only a handful done close to home, while most of League’s investment activity has been across Canada. “It’s hard when you’re kind of singled out in a way where people don’t believe you are doing the right thing.”
It is not misinformation and rumours. It’s your balance sheet and your lack of fiduciary responsibility that I, investors and critics have a problem with. It’s your targeting of seniors, new immigrants and naive investors using misleading marketing materials (AKA The Blue Book of Real Estate Syndication) written at an 8th Grade reading level that we have a problem with. It’s also the two currently British Columbia Supreme Court foreclosure litigations on the Colwood project and the work stoppage that have people asking questions
“Meaningfulness” is irrelevant. Making money for investors is relevant, paying out distributions is relevant, sustainable business planning is relevant and observable measurable benchmarks of progress are relevant. Unfortunately, these are alien concepts to League
Nothing is more damning than your own financial statements. You’re as good a magician as David Copperfield. He made the Statue of Liberty disappear and you make investors’ money disappear.
Quote From Adam Gant & Emanuel Arudda’s Notice of Application
p.11 As set out in the audited consolidated financial statements for League IGW REIT, as at December 31, 2012, had $310,760,668 in total assets and $264,655,576 in total liabilities, excluding net assets attributable to unit holders.
What that means in plain English is that if you don’t count what IGW REIT owes to the investors the REIT has assets of around $46 million. But according to the BCSC they have raised $290 million from (screwed) investors which mean that somehow, someway $250 million dollars of old retired people’s money has vanished, been squandered or gone missing.
Non Arm’s Length Transactions
If you were going to invest money in League… you would start at a company called League Investment Services Inc. LISI is an exempt market deal but it is still required to have a standard of conduct BY LAW
In British Columbia, it is found in section 14 of the Securities Rules
Fair dealing with clients
14 (1) A registrant must deal fairly, honestly and in good faith with the clients of the registrant.
(2) A registered
(a) dealing representative, or
(b) advising representative,
of a dealer or adviser must deal fairly, honestly and in good faith with the clients of the dealer or adviser.
LISI owned by Adam Gant and Emanuel Arruda are required to deal fairly and ethically with their investment clients. Does it sound like sound financial advice for a widow (Lori K) to invest all of her insurance proceeds with League? Is is sound financial advice to promote these risky, speculative, over leveraged real estate investments to people who are a few years shy of retiring? I think not, and I think this is going to be a lot bigger problem than Adam Gant thinks.
Another troublesome non arms length transactions that seem suspicious are the $99 million in outstanding loans between companies, the “votes” to change the rules governing redemptions and the valuation of properties.
The following is a quote from my affidavit filed August 19th and freely available in full to anyone with $12 on the BC Court website.
“At p.11 of the Notice of Application is found a misleading, incorrect factual error. Ms. McGrann refers to the assets and liabilities when referring to the “financial health” of IGW REIT, yet she would like to exclude the “net assets attributable to unit holders”. This is a red herring. The funds invested by unit holders are liabilities for the company. In a properly run REIT, interest is payable on those units and they are reimbursable shortly after demand. For the plaintiff to suggest that the investor’s funds should be excluded begs the question of whether the plaintiff has breached its duty of good faith and fair dealing and the fiduciary duty owed to the investors and to make a full accounting of all investor funds.
In Plaintiff’s Exhibit E on page 296 losses for IGW REIT are as follows…
- 2010 IGW REIT losses total ($19,104,524)
- 2011 IGW REIT losses total ($26,916,631)
- 2012 IGW REIT losses total ($62,571,109)
- Three year loss total is ($108,592,264)
Response to “Irrationality” Comment
Adam Gant said to the Time Columnist that “We like honest feedback, analysis of results and criticism of strategy and approach. What we don’t like are people irrationally or in an unsupported way making accusations that have no basis in reality,” he said, noting that kind of rhetoric tends to have an effect on people who don’t have time to dig for the truth themselves. “We are not going to stand by any unbiased accusations.”
Mr Gant is so inured to respectable business practices and investor trust that he considers my criticism of his business practices irrational. To which I ask, “Are you a sociopath Mr.Gant?” $250 million is a lot of money and people don’t deserve to have their money mishandled by you… this is money many of them have scrimped and saved for years before making the mistake of handing it to you based on your deceptive and misleading marketing practices.
Your behaviour is not acceptable. You and Emanuel have spend years molding an illusion of respectability and competence when you are anything but respectable and competent. There’s no fancy office or coat of arms that can hide that for much longer.
Your company is dying, killed by unsustainable interest rates on loans and your own ineptitude and lack of leadership. Unfortunately there’s enough life left in the beast to slay another round of investors while flailing around in it’s final agony.
Note To Times Columnist
“Slowest Construction Project on Earth” or “White Elephant Towers Grinds To a Halt… AGAIN” would be a more appropriate title for your article.
I’d be glad to share information with you, such as how League encouraged investors to make use of Home Equity Lines of Credit to invest with. Or how they promised original investors 15% ROI. Or their fascinating “Investment Guarantee” and “Liquidity Agreement”. SLAPP suits are a real phenomenon used by bullies to intimidate and silence people voicing real concerns about the public good.
Times Columnist - You’ve been used, please report the real story.