Bearspaw Appeals and Tsehum Harbour Removed from CCAA...

On Thursday last week, our counsel attended the Court of Appeal with respect to motions by the Bearspaw secured creditors (Investit Financial Inc. Romspen Mortgage Corporation) for a stay of the Order of Justice LoVecchio of October 8, 2009 pending the hearing of their leave to appeal applications on December 1, 2009. They want a stay because they do not want the parties to draw on the debtor in possession financing (which was increased from $1,000,000 to $2,500,000 by the Court Order) until the appeal. Shire and the Monitor say that this delay is potentially jeopardizing the restructuring process.

The judge hearing motions at the Court of Appeal started off saying that he did not have time to read the materials as he had only just received them. The parties agreed to adjourn this stay application to Friday, November 13 at 10:30 a.m., on the basis that they agree to a stay (ie not draw on the DIP) until that time.

Also on Thursday, the secured creditor for the Tsehum Harbour project (Fisgard Capital Corporation) argued its application before Justice Wilkins in the Court of Queen's Bench. Fisgard holds a mortgage over the Tsehum Harbour Property in BC and it had previously started foreclosure proceedings against this property. This property is owned by Bosun's Holdings Ltd. ("Bosun"). In the most recent order of Justice LoVecchio, the initial CCAA Order had been amended to include Bosun.

Fisgard argued that it didn't get notice and it should not be included in the CCAA proceedings. It also argued that as it was clear the outstanding mortgage exceeded the value of the property, this property should not be subject to superpriority DIP charge.

The judge agreed with Fisgard, and ordered that Bosun be removed from the proceedings. In particular the judge referenced the affidavit of Couch in support of the order adding Bosun in which she stated that Bosun did not have any real assets. As there was no evidence of any equity, it is difficult to argue that Bosun should remain in the proceedings, so this decision likely makes little difference to us.

RCMP make pitch for greater powers...

Great article in the Globe and Mail today by Janet McFarland. Read it on their website, or in pdf format.

Monitor's Reports Four and Five...

The Monitor/Receiver Ernst & Young have realeased two more reports. You can read them here (four) and here (five) or on their website at http://www.ey.com/ca/shire.

Manitoba Securities Commission - Cease Trade Order...

The Manitoba Securities Commission issued a cease trade order on September 30, 2009 against:

Jeanette Cleone Couch, Shire International Real Estate Investment Ltd., Shire Asset Management Ltd., Hawaii Fund, and Maples and White Sands Investment Ltd.. You can read the order here.

Federal Gov't News Release on White Collar Crime...

Minister Rona Ambrose made this press release in Edmonton today with myself and other alleged victims of Shire International in attendance. Similar press releases were also made in Montreal and Ottawa.

Ottawa on Wednesday will introduce long-awaited legislation that would impose a minimum two-year mandatory prison sentence to anyone convicted of committing fraud over $1 million regardless of the number of victims.

“Fraud can have a devastating impact on the lives of its victims, including feelings of humiliation for having been deceived into voluntarily handing over their life savings” federal Justice Minister Rob Nicholson said Tuesday. “This legislation will help crack down on white-collar crime and increase justice for victims by providing tougher sentences for the criminals responsible.”

The proposed new law will also add aggravating factors to be considered when handing down sentences in such fraud cases, including:

• The financial and psychological impact of the fraud on the victim, given the victim’s particular circumstances such as age, health and financial situation;
• If the offender failed to comply with applicable licensing rules or professional standards;
• The magnitude, complexity and duration of the fraud, and the degree of planning that went into it.

Media coverage so far can be found at the following links:
http://www.inews880.com/Channels/Reg/LocalNews/story.aspx?ID=1153391
http://www.google.com/hostednews/canadianpress/article/ALeqM5g5M1-rD7f3LoMAE9zTGKrdPaf2Hw
http://www.montrealgazette.com/Tough+legislation+fight+white+collar+crime/2124485/story.html

Several other related news articles

Ottawa proposes get-tough legislation for white-collar crime
- TV coverage with several of the Earl Jones & Mont Real victims interviewed at today's Montreal press conference with Hon. Minister Christian Paradis
Watch the CTV NEWS VIDEO PLAYER (see: Caroline Van Vlaardingen reports) at http://montreal.ctv.ca/servlet/an/local/CTVNews/20091020/mtl_white_collar_crime_091020/20091020/?hub=MontrealHome

More CTV News Coverage:
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20091020/white_collar_091020/20091020?hub=QPeriod

Ottawa vows tougher white-collar sentencing
The Toronto Star http://www.thestar.com/news/canada/article/712924--ottawa-vows-tougher-white-collar-sentencing

White-collar criminals face new sentences
The Globe & Mail http://www.theglobeandmail.com/news/politics/white-collar-criminals-face-new-sentences/article1330732/
The Globe & Mail - Business http://v1.theglobeandmail.com/servlet/story/RTGAM.20091020.wwhitecollar1020/BNStory/Business/

Ottawa unveils white collar crime bill
The Globe & Mail online video http://www.theglobeandmail.com/video/ottawa-unveils-white-collar-crime-bill/article1330741/

White-Collar Redux (x2)
CBC News http://www.cbc.ca/news/canada/politicalbytes/2009/10/white-collar-redux-x2.html

Post Court Update...

On October 8 we appeared in Court with respect to a variety of matters. On the day before the hearing, the Monitor filed an extensive and lengthy report detailing its findings to date. The Monitor continues to obtain and review additional information as it becomes available.

The Court granted numerous orders, summarized as follows:

1. Extended the stay of proceedings to December 8
2. Increased the debtor in possession financing (interim financing) by $1 million
3. Refused to lift the stay of proceedings with respect to two mortgagees seeking to foreclose
4. Appointed Ernst & Young as Receiver so that it can market and/or deal with individual properties
5. Directed that funding of $100,000 be paid out of the debtor in possession financing to legal counsel for some of the investors to cover legal costs and disbursements
6. Directed the establishment of a Management Committee to advise the receiver.

The next hearing is scheduled for December 8, 2009, but we expect progress in the next month as the Receiver establishes the Management Committee and begins a request for proposal process concerning the potential sale of some or all of the Shire group properties. In addition, we expect the Receiver/Monitor to continue to obtain additional information to complement its most recent report.

Third Report from the Monitor...

The third report of the Monitor (Ernst & Young) can be found here. For more information, please visit http://www.ey.com/ca/shire.

See you in court tomorrow...

Back online...

Amazing what the folks at Apple can do in such a short time. I'm back online with a flashy new hard drive and all of my data back as though nothing ever happened. Now comes the hard part - catching up!

HARD DRIVE FAILURE....

My hard drive has died. All of my info has been backed up but I am off line for a few days while the wonderful folks at Apple install a new one. Thank you for your patience, I will have extremely limited access to email during this time. I'll post and update as soon as I am back online.

Summary of Proceedings - Friday October 2nd

Today we attended in Court with respect to an application to extend the stay of proceedings to and including October 8, 2009. Essentially the Monitor has not completed its report, and requires more time to do so. Given the short amount of time, we supported the extension and the Court agreed, extending the stay of proceedings to Thursday, October 8, 2009 before Mr. Justice LoVecchio. We also advised the Court that we had requested a shareholder registry for each project company, and that if necessary we would bring an application in this regard. The Monitor's counsel advised the Court that these lists were "in the works".

In addition, the application by certain mortgagees to lift the stay was adjourned by consent to October 8, 2009 at 9 am, when the next hearing will take place. The Court has booked one half a day for ths next hearing, at which point we will be will have a more complete Monitor's report, as well as further details concerning the proposed establishment of a stakeholder committee.

** This has not been emailed out, but will be sent out as soon as my Mac is back up and running early next week. **

Second Monitor's Report...

The second report from the Monitor, Ernst & Young, can be found here. It should be available on their website in a few days at http://www.ey.com/ca/shire. Also, please can read the latest Notice of Motion and Affidavit from Cleone Couch.

The next court date is tomorrow! Here are the details:

CCAA and Shire et al. (Action No. 0901-11866) will take place:

Friday, October 2nd @ 9:00am at:

Calgary Courts Centre
601 - 5 Street S.W.
Calgary, AB T2P 5P7

The proceedings are open to the public if you wish to attend. I encourage everyone to attend as the proceedings do affect your investment and attending is one of the best ways to stay informed. Please note that investors will not be able to speak at the proceedings, only attend as a part of the general public. I will be present and available afterwards for comments and questions.

A note regarding security at the Calgary Courts Centre: There is immense security at the centre, please come a little early to ensure that you can clear security prior to the hearing. After the public goes through security, there are electronic lists on the wall notifying the action number, name (In the matter of the CCAA and Shire et al.) and courtroom. If you can't find the room, there is an information office where you can ask for assistance.

I will also have copies of The Canadian Coalition Against White-Collar Crime demand stiffer sentencing for White Collar criminals petition for anyone who would like to sign.

Radio Canada International - Fraud Panel Discussion

I was invited to participate in a panel discussion about fraud on CBC Radio Canada International’s “The Link” with Marc Montgomery this week. Please listen to CBC Radio Canada International’s “The Link” online today at 9am MST:
http://www.rcinet.ca/rci/en/emissions/1952.shtml
Click the > (play) button on the right hand side of the page.

If you miss the live show today, the show will be available for the next month.

1. Go to: http://www.rcinet.ca/rci/en/emissions/1952.shtml
2. Click the > (play) button on the right hand side of the page
3. Select “Create my playlist”
4. Select “The Link - Part 2 –2009-09-25”

Appalling comments from Ed Stelmach...

Please read this article published in today's Calgary Herald where Ed Stelmach had a few less than savoury comments:

Speaking in Banff, Premier Ed Stelmach said he feels sympathy for the people who lost money in the alleged Calgarybased Ponzi scheme. But he said he's certain the province has strong securities legislation in place.

That's why there are loopholes that allow Ponzi schemes to proliferate in our province.

"My heart goes out to those people who took risk and went out and invested in what they thought was a reasonable investment-- but anyone that invests takes a certain amount of risk," Stelmach said.

So Ed... Would it be a correct assumption from your statement that a part of the risk is that a company may be fraudulent and stealing our money and that this is an acceptable risk according to YOUR government? I would argue that this is not a risk that was assumed or accepted by investors when they made their investments with these companies.

"I've been told by the federal government that our legislation for the Alberta Securities Commission is one of the best in the country of Canada, but we certainly want to know where there are maybe some gaps and ensure that it doesn't happen again."

You want to know where the gaps are? We're telling you and you're ignoring the facts before you.

Stelmach added there won't be compensation offered to investors stung by the scheme.

"It's risk-taking, but Alberta is always also known for its risk-taking," the premier said. "That's why we're as prosperous as we are."

Perfect. Welcome to Alberta. Open door to Ponzi schemes - buyer beware.

A great big THANK YOU to the Committee...

A few of you have asked if I paid for the trip to Ottawa myself. The answer is NO...

I owe a big THANK YOU to the Shire Victims Committee members who graciously came forward with their own hard earned cash and covered the expenses of my trip. Thank you, thank you, thank you is not enough.

Also, my hotel accommodation was provided by Diane Urquhart, the independent financial analyst lobbying for the Securities Crimes Unit.

Ottawa update...

On Monday, September 14th, I flew to Ottawa to represent the Shire Victims Group. Monday night was mostly a travel day, but I met with the Honorable Jim Prentice, Minister of the Environment at 8pm Monday night. Now one might ask why I would meet with Minister of the Environment, but it just so happens that he is my Member of Parliament. I had an excellent meeting with Minister Prentice where I discussed our particular situation. Our message was well received and the Minister encouraged me to follow up with him after I returned home. He also encouraged me to be strong and keep up our fight.

Specific recommendations made to the minister were:
1. Securities Commissions should handle all communications to investors regarding the cease trade order citing the specific allegations. Allowing a company under cease trade to provide official notice to investors using their own wording is not acceptable and is misleading to investors.

2. Creating a clear process for the intake of white-collar crimes complaints such as the proposed Securities Crimes Unit. Today there is a lack of clarity amongst divisions who should take a complaint and whether the complaint should be investigated.

3. Provide additional resources to police fraud units to reduce investigation times. Slow investigations lead to loss of critical evidence, lag in prosecutions, and reduced success of civil claims.

4. Creating a single Canada-wide National Securities Commission with a harmonized regulatory and enforcement framework. It is evident that individuals & corporations are able to simply pick up & relocate to other provinces in Canada and continue to perpetrate fraud.

5. Licensing the exempt market. This raises responsibility of those selling securities to the public to take reasonable care in knowing the nature and legitimacy of the investments for which they receive a commission.

6. Imposing mandatory minimum and stiffer sentences for white-collar crime. The life-time impact on victims of white collar crime is frequently no less than for violent crimes.

7. Eliminate the "one-sixth" rule completely, whereby non-violent criminals are eligible for parole after serving a small fraction of their sentence.

Tueday, September 15th was a jam-packed day. It started with hearing our story carried again by CBC Radio News. They covered the Syndicated Gold Depository SA story and mentioned our story and that I was in Ottawa as part of a group lobbing the federal government on a Securities Crimes Unit with hopes to lead to more effective investigations and enforcement.

At 8:30am, we had a meeting at the Prime Minister’s Office. The meeting was an opportunity for many victims groups to bring their stories forward in support of changes in legislation to protect Canadians from white-collar crime and to ensure that victims of white-collar crime receive support and see justice served. All who attended positively received the meeting and an invitation was extended to develop an on-going relationship to continue to develop changes to protect and provide justice for all Canadians with regards to white-collar crime. Government representatives at the meeting were:

PMO:
Julie Gaudreau - Special Assistant for Quebec
Adam Blinik - Special Assistant for Justice Groups
Sabrina Anzini - Special Advisor Legal Affairs and Policy

Department Of Justice:
Ken Bednarek - Senior Policy Advisor
Genevieve Breton - Director of Communications

At 11:00am, the first press conference was held in the Charles Lynch Press Theatre in the Center Block of Parliament. The subject of the first conference was “New Securities Crime Unit in Addition to New National Securities Commission”. Diane Urquhart, an independent financial analyst, is proposing a new structure to receive and assess securities crime complaints and to assign the criminal files for investigations and prosecution to the appropriate police services throughout Canada or to the RCMP. More information on her proposal can be found in the Securities Crime Unit video at http://www.ismymoneysafe.org. Several victims groups spoke in support of the proposal.

At 11:30am, the second press conference was held in the Charles Lynch Press Theatre in the Center Block of Parliament. The subject of the second conference was “The Fight Against Financial Crime”. Many victims groups shared their stories and proposals. I represented the Shire Victims Group and my press release was sent out by email to our group yesterday. Joey Davis of the Earl Jones Victims Committee also officially announced the BE STRONG Movement and The Canadian Coalition of Citizens Against White Collar Crime. Their website is http://www.bestrongfoundation.org.

Both press conferences were broadcast live to the offices of all Members of Parliament. The second press conference (including my statement) was also carried live by CTV News Watch and CBC Newsworld.

After many press interviews, we then met with Justice Minister Rob Nicholson who briefed our group on the changes to be announced at his press conference and advised us that he is committed to ensuring victims are heard. Three of the group members were present at the press conference: Earl Jones Victims Group, Norburg Victims Group, and Diane Urquhart. The changes being put forward by the Justice Minister are:

- Amend the criminal code to allow for mandatory penalties for fraud
- Additional aggravating factors to justify longer sentences
- Requirements that the courts consider restitution orders

Further, the minister also talked in our meeting about future actions that may include:
- Prohibitions to limit criminals ability to ever repeat similar crimes in the future
- Continued push to pass a bill to end house arrest
- Promise to talk to the Public Safety Minister to remove ability for those convicted of white-collar crime to receive parole after serving only 1/6th of their sentence.

At 2:20pm, we were guests of the PMO at Question Period in the House of Commons where the issue of white-collar crime was raised by a few of the members.
http://www.cpac.ca/forms/index.asp?dsp=template&act=view3&pagetype=watch&lang=e&watchID=1e



The groups who attended the meetings on Tuesday were:
Earl Jones Victims Committee
Norburg Victims Committee
Norshield Victim Group
Nortel Bankruptcy Justice Committee
National Pensioners and Senior Citizens Federation
United Senior Citizens of Ontario
Diane Urquhart – Independent Financial Analyst

Finally, at 3:30pm Joey Davis of the Earl Jones Victims Group and I were interviewed on CPAC Primetime Politics with Peter Van Dusen. You can watch the story online here:
http://www.cpac.ca/forms/index.asp?dsp=template&act=view3&pagetype=vod&lang=e&clipID=3085



I finally arrived home at 10:30pm on Tuesday night.

Tories mull minimum sentences for white-collar crime

A few interesting articles for you:

Tories mull minimum sentences for white-collar crime
Mike De Souza, Canwest News Service
Published: Thursday, August 13, 2009
The Vancouver Sun

Ottawa's looking at minimum jail terms for swindlers: justice minister
Mike De Souza, Canwest News Service
Publushed: Friday, August 14, 2009

A long winded update to end a busy week...

Its been another busy week, so I thought I’d send one big update to keep the spam down...

Legal update:
John Blair was away from his office this afternoon, I’ll have to get an update from him next week to send out on Wednesday. We have many more investment victims signing on to the class action every day. Mr. Blair’s office has requested several key documents and will be reviewing them as they are received. We are actively preparing for the E&Y report later this month and the next CCAA hearing. Please mark your calendar: The next CCAA hearings is October 2 @ 9am at the Calgary Court Centre. Note – the date/time may be subject to change so I’ll keep you posted!

Political Update:
Last week, Joey Davis of the Earl Jones Victims Committee hand delivered a letter on behalf of our group to Justice Minister Rob Nicholson. On Tuesday, he also hand delivered a similar letter to Finance Minister Jim Flaherty. Our letter was graciously accepted by both Ministers and I was provided with direct contacts in both offices to follow up. I look forward to updating you on this progress.

I was contacted early this week by Diane Urquhart who graciously invite me to Ottawa on Tuesday, September 15th to represent the Shire Victims Group at a press conference with the National Press Gallery. Ms. Urquhart, an independent financial analyst, is lobbying for the creation of a Securities Crime Unit (SCU), a new Federal - Provincial structure to organize and fully utilize the resources and facilities of all the police agencies of Canada in order to provide for the public safety of our pension funds and personal retirement savings throughout Canada. For more information, please watch the Securities Crime Unit video on her website http://www.ismymoneysafe.org

Further to the press conference in Ottawa, the trip will be an excellent opportunity to build relationships with the Earl Jones Victims group and several other similar groups. I will also be attending other important meetings which I will provide updates and details about once I return.

Media Update:
I was a guest on The Rutherford Show on Wednesday, September 9th at 10am. If you missed the show, please check it out in their audio vault. Please be sure to listen past my interview for the very relevant interview with private investigator Ron Reinhold. The show will be available for you to listen to, at your convenience, for one month from the air date.
http://www.am770chqr.com/Station/AudioVault.aspx

Manitoba Securities Commission - Notice of Hearing
The Manitoba Securities Commission held a hearing September 9th at 9am local time to determine if the MSC should also impose a cease trade order against Jeanette Cleone Couch, Shire International et al. You can view the notice of hearing here:
http://www.msc.gov.mb.ca/legal_docs/investigation/hearings/couch.html
I'll keep my eyes open for the results of the hearing and post them as soon as possible.

Website Updates:
I have updated the documents website that you can link to from the blog at the bottom of the “Document Links” section choose “All documents referred to in this blog” or directly here:
http://sites.google.com/site/shireinvestor/Home
I will be posting documents by project. If you have additional documents for a specific project that are not posted, please get in touch with me and I’ll let you know if I still need copies. I am still in the process of getting documents online, but there are several new documents including recent pictures on some of the projects.

Committee Phone Calls:
Just a reminder that you may receive a phone call from one of our committee members over the next few days or weeks.

Other News:
The Earl Jones Victims Committee is working to create the Canadian Coalition Against White Collar Crime. Their website is:
Be Strong Movement: http://www.bestrongfoundation.org/
Please sign their petition and support the fight against financial crime in Canada:
http://www.bestrongfoundation.org/petition/

Please don’t hesitate to contact me should you have any questions or comments.

Manitoba Securities Commission - Notice of Hearing

I received this notice via one of our group members this morning. The Manitoba Securities Commission held a hearing this morning at 9am local time to determine if the MSC should also impose a cease trade order against Jeanette Cleone Couch, Shire International et al. You can view the notice of hearing here:
http://www.msc.gov.mb.ca/legal_docs/investigation/hearings/couch.html

I'll keep my eyes open for the results of the hearing and post them as soon as possible.

The Rutherford Show - In case you missed it...

If you missed the show... You can hear it at you convenience, for the next month, at the audio vault at QR 77 and 630 CHED at:
http://www.am770chqr.com/Station/AudioVault.aspx
http://www.630ched.com/Other/audiovault.html

Date: September 9, 2009
Hour: 10:00

Private Investigator Ron Reinhold also spoke on today's show regarding real estate fraud. His website is: http://www.rainbowinvestigations.com/

He also wrote an article in "The Investigative News" regarding our story on August 24, 2009 which can be found here:
http://www.rainbowinvestigations.com/news/story.php?rainbowID=310

The Rutherford Show - Today @ 10am...

Our story will be covered live on The Rutherford Show today at 10am MST. Please tune in:

Calgary: AM 770 CHQR
Edmonton: AM 630 CHED

Online:
www.am770chqr.com
www.630ched.com

My apologies for the short notice – I just received confirmation.