Date: Sat, 14 Nov 1998 01:26:41 -0500 From: Darrell Todd Maurina Reply-To: Darrell128@aol.com Organization: Christian Renewal/United Reformed News Service Subject: NR 98114: Eenhoorn Announces 11/15 Dealine for Withdrawing IRM Purchase Offer NR #1998-114: Eenhoorn Announces November 15 Deadline; Paul Heule Expects to Withdraw Offer to Purchase IRM Assets Since shortly after Carl and Paul Heule appeared on the scene and offered to purchase the troubled IRM California real estate partnership, Christian Reformed officials have generally said they wanted to "level the playing field" by making Eenhoorn one of the bidders rather than the preferred bidder to purchase IRM. They may instead have succeeded in causing Eenhoorn to back out of the deal entirely. "The IRM officials have indicated to me they want to do a lot of research with consultants and want me to sit around and wait while they do their work; I'm not willing to do that," said Paul Heule, son of Eenhoorn founder Carl Heule and one of the principals of the corporation. "I do not want them to tie me up for the next six months. Quite frankly, we could be looking at an entirely different portfolio than we have now, there could be foreclosures, more expenses will be incurred as this takes more time." NR #1998-114: For Immediate Release: Eenhoorn Announces November 15 Deadline; Paul Heule Expects to Withdraw Offer to Purchase IRM Assets by Darrell Todd Maurina, Press Officer United Reformed News Service (November 12, 1998) URNS - Since shortly after Carl and Paul Heule appeared on the scene and offered to purchase the troubled IRM California real estate partnership, Christian Reformed officials have generally said they wanted to "level the playing field" by making Eenhoorn one of the bidders rather than the preferred bidder to purchase IRM. They may instead have succeeded in causing Eenhoorn to back out of the deal entirely. "The IRM officials have indicated to me they want to do a lot of research with consultants and want me to sit around and wait while they do their work; I'm not willing to do that," said Paul Heule, son of Eenhoorn founder Carl Heule and one of the principals of the corporation. "I do not want them to tie me up for the next six months. Quite frankly, we could be looking at an entirely different portfolio than we have now, there could be foreclosures, more expenses will be incurred as this takes more time." "This is not just another project we invested in, this is something I put my heart into, but I will go on to other projects," said Heule. "I feel very disappointed for the investors. I think the company is making a wrong decision, wrong for them and wrong for the investors." Heule said his company had filed a $1 million claim with the US Bankruptcy Court for expenses they have incurred to date in the IRM matter, including money loaned to one of the IRM properties to prevent a bank foreclosure that could have forced the whole IRM enterprise into bankruptcy. Eventually IRM filed for bankruptcy anyway, citing a need for protection from the "Kool petition," a lawsuit filed against IRM by 20 individual investors, three Christian Reformed agencies, and the CRC-related Barnabas Foundation. Due to the mounting expenses incurred by Eenhoorn , Heule said he had set a November 15 deadline for purchase of the organization. "I've informed the IRM attorneys and the new CEO that we would give people the opportunity to stay in the transaction or to cash out for 30¢ on the dollar," said Heule. "What I want is to enter into a contract with IRM and the Creditors Committee, subject to approval by the US Bankruptcy Court, and I would be willing to accept as a condition a review by an outside accounting firm." The original Eenhoorn proposal called for purchasing the interests of IRM and its unsecured debt to investors, pay five cents on the dollar to investors initially, and then pay the remaining 95% of investment without interest over a period of ten to eleven years if Eenhoorn is able to make a profit off the properties. A special clause would have paid 75% of the investment to "hardship cases" for whom the loss of IRM income has devastated their personal finances. So far there has been no official response to the Eenhoorn offer - and probably can't be since the Kool petitioners don't intend to withdraw their lawsuit until after November 23 when the bankruptcy court will complete contractual arrangements with the new court-appointed IRM chief executive officer, John Connolly IV. In a compromise with the Concerned IRM Investors who in cooperation with sympathetic non-members hold a working majority on the court-appointed Creditors Committee, the Kool plaintiffs agreed to withdraw their lawsuit in return for the appointment of an outsider as CEO of IRM. Those delays became too much for Eenhoorn . "I have not heard anything from IRM or from the Creditors Committee, I assume I will be withdrawing," said Heule. "I want to put closure to this, we've spent a lot of money on this and I don't want to keep spending money." David Buurma, IRM's senior vice president for client services, said the failure to respond to Eenhoorn's deadline was "extremely frustrating," and emphasized that it wasn't due to inattention by the former IRM principals who are now employees of the corporation. "To see him leave would be tragic," said Buurma. "Eenhoorn literally created a market; before he presented his offer, people were willing to take over management but not put up money," said Buurma. "He created a market and it's kind of sad to see him go away, particularly because we think he has the best offer for the investors." Buurma blamed the Christian Reformed Church for the expected Eenhoorn withdrawal. "I would say the church is certainly responsible for it; it's only because of their fighting that this has dragged out so long," said Buurma. "The bottom line, as far as I'm concerned, is in May we entered a contract with Eenhoorn that required investor approval to complete. To date we have not seen an investor offer that is better." "It's a shame we have wasted five or six months doing nothing but discouraging people from making other offers," said Buurma. "If Eenhoorn made the best offer it could have been completed by now and the cash flows could have been started, but now we're looking at another six months." CRC Executive Director of Ministries Dr. Peter Borgdorff said he didn't know about Eenhoorn's November 15 deadline, but defended the decision to postpone action anyway. "To act on the Eenhoorn deal by an artificial deadline of November 15, as genuine as that may be to Mr. Heule, obviously is to impose upon the committee a deadline or a procedure that they may not be prepared to accept, and I would support their judgment in that," said Borgdorff. "The Creditors Committee, working with the new management, need to establish and follow some rules that they have adopted for themselves, and that is that whatever offers are on the table, and that are on the table when they are ready to make a selection, or a selection of one or more for further pursuit, all of them need to be on the table at the same time." Borgdorff defended the Kool petitioners use of the secular court system and said the request for new IRM management was necessary to stop a premature sale to Eenhoorn . "It was an effort to level the bidding process, and in order to really accomplish that we needed new management with accountability to the court, and therefore the petition," said Borgdorff, noting that at the time the lawsuit was filed, out-of-court negotiations had broken down and the CRC was confronted with a new unofficial Concerned IRM Investors committee taking strong public positions against the CRC. "We thought that the best thing that could be done under that set of circumstances was a court-sanctioned trustee who could bring some order to the house and who would by the very nature of their appointment and authority, be more objective than current management could be, in as much as current management at that time were publicly and in writing under contractual agreement to Eenhoorn," said Borgdorff. "So that is where the concern comes out that if the IRM principals remained in control, that Eenhoorn would be the only deal on the table." Although he had presented the Eenhoorn plan at public meetings in Grand Rapids and California sponsored by the Concerned IRM Investors, Heule said he didn't want to leave the IRM matter with hard feelings. "Two big firms have looked at the books, I've looked at the books, and all it will do to bring in outside consultants to look at the books will be to cost more money," said Heule. "I believe the decisions that they are taking are being taken with the best intentions, I do not believe anybody is trying to be malicious. It's a difference of philosophy and I can respect that." Cross-References to Related Articles: #1998-006: Classis Chatham asks Top Christian Reformed Administrative Committee to Appoint Independent Investigators of $11.5 Million in Questionable Investments #1998-028: Classis Lake Erie Overtures Christian Reformed Synod to "Ensure the Editorial Freedom of the Banner" #1998-067: IRM Debate Extends Synodical Session #1998-068: Synod Responds to Possible Multimillion Dollar Fund Loss #1998-080: IRM Investment Debacle Leads to Litigation; Estimate of Funds at Risk Balloons from $11.4 to $228 Million #1998-083: IRM Declares Bankruptcy; CRC Files More Litigation Seeking Removal of IRM Management #1998-084: Bankruptcy Court Postpones Action on CRC Lawsuit to Remove IRM Management; "Concerned IRM Investors" Leader to Chair New Investors/Creditors Committee #1998-091: IRM Management Resigns as General Partners; John Barnard to Become CEO of Troubled California Real Estate Firm #1998-103: A Glimmer of Good News: Home Missions May Receive Partial Payment on $1.1 Million of $7.925 Million Invested in IRM California Real Estate Corporation #1998-104: San Francisco IRM Investor Files $45 Million Suit Against Attorneys Retained by CRC Agencies and Individual Investors #1998-109: Bankruptcy Court Appoints New CEO for IRM; Plans Announced to Drop Christian Reformed-Led Lawsuit #1998-115: Christian Reformed Officials Explain Lawsuit Against IRM Contact List: Dr. Peter Borgdorff, Executive Director of Ministries, Christian Reformed Church 2850 Kalamazoo Ave. SE, Grand Rapids, MI 49560 O: (616) 246-0832 ¥ H: (616) 957-3288 ¥ E-Mail: borgdorp@crcna.org David Buurma, Senior Vice President for Client Services, IRM Corporation Office: 2151 Salvio St., Suite 325, Concord CA 94520 Mailing: PO Box 3000, Concord, CA 94522-3000 O: (925) 676-1966 ¥ FAX: (925) 676-1744 Paul Heule, Partner, Eenhorn L.L.C. Office: 2610 Horizon Dr. SE, Suite C1, Grand Rapids, MI 49546 Mailing: PO Box 88335, Kentwood, MI 49512 O: (616) 530-5500 ¥ FAX: (616) 530-0850 ---------------------------------------------------------- file: /pub/resources/text/reformed/archive98: nr98-114.txt .