This is an incredibly well-written and well-researched article about Concrete Equities – I’m not sure how I missed it when it was published in September 2009 (maybe because I was in new dad mode), but it’s worth a read for anyone involved in this debacle. This paragraph is particularly apt:
“Recently returned CEO Dave Jones played the absent founder; current president Vincenzo De Palma, whom you might recognize from Concrete’s TV ads, drew from a background mostly spent selling lumber out of Prince George, B.C.; 20-something executive Vinnie Aurora’s qualifications included being the son of a colleague of Jones; and, along with experience as an investment industry veteran, office manager Dave Humeniuk bore the albatross of a lifetime ban from selling real estate in the province of Alberta. The result: a corporate environment poisoned by infighting and finger-pointing and which produced no significant financial reporting, a lapsed mortgage, allegations of impropriety and incompetence, no dividends since the start of this year despite purportedly cash-positive properties, and, because of it all, more than 2,000 investors raring for a fight.”
If ever there was a cautionary tale for investors, this is it!
If for whatever reason the link above isn’t working, a copy of the article can be found here.
Earlier this year, there were a couple of discussion threads started in the Canadian Business forums about Concrete Equities. The threads were full of useful information, and I posted in them several times. Curiously, right around the time that Vincenzo De Palma had his lawyers threaten to sue me for libel, the threads in the Canadian Business Forums were deleted. I don’t know why they were deleted – in fact a post I made there asking what happened was deleted – but it’s not hard to see the reasons why. Someone contacted me earlier this week about this topic; they’ve created a blog with all of the posts originally made to those Canadian Business Forum discussion threads about Concrete Equities. It makes for some interesting reading!
Above is a screen shot of the PDF file I was sent via email today by one Becky Mansour, Jeff Bone’s legal assistant. In order to “govern myself accordingly”, I’ve contacted the firm of BURNET, DUCKWORTH & PALMER LLP to advise me on this matter. I find it puzzling that Mr. De Palma’s lawyers think that simply writing the name of their client on this site is libellous. In my understanding of libel law, writing someone’s name online cannot be considered libel. At any rate, I have the weekend to consider my options and the advice of counsel.
Fact: Vincenzo De Palma, President of Concrete Equities, has accused me of libel via his lawyer, Jeffrey Bone.
Fact: I received the following letter today, stating this:
Fact: I phoned Jefferey Bone less than an hour ago to inquire which of my “remarks” they consider to be “defaming” and “disparaging”, but I was unable to get in touch with him. I’m waiting to hear back from him and cannot proceed until I get clarification.
Fact: I’d much rather be editing videos of my son Logan than writing this blog post.
Fact: All information contained in this post is a fact.
UPDATE: I’ve had a short discussion with Jefferey Bone and he’s going to get specifics from his client and get back to me.
I just got word via email that there’s a meeting for all Concrete Equities investors:
“There is a general meeting being held for “ALL” investors in Concrete Equities projects, including the Mexico Properties. It is very important that you attend this meeting being held:
Wednesday June 17, 2009 – 7PM
Southside Victory Village
6402 1A ST SW
We are now starting to receive emails from El Golfo investors asking “what is being done”, how does our investment stand”. To this end we have formed a Mexico steering committee and alligned ourselves with the Calgary Buildings Steering Committee.”
If you can be there, you should be there.
“A judge has sided with Concrete Equities in its application to appoint Ernst and Young as an interim receiver in a dispute with a group of disgruntled investors in five downtown buildings. By doing so, Court of Queen’s Bench Justice Barbara Romaine rejected the investors bid, at least temporarily, to have Concrete, a Calgary-based commercial real estate fund, replaced as general partner of the buildings that were placed under receivership earlier this spring. “I had hoped by this decision to enable the receiver to work on getting financial information to the limited partners as quickly as can be done,” said Romaine. The judge left the door open for the limited partners to argue on the issue of whether its choice of a new general partner should be named. That is scheduled for June 24.” – Calgary Herald, June 9th, 2009
Well that’s not good news – I know virtually nothing about the law in this area, but it’s rather curious to me that the judge wouldn’t allow us (the Limited Partners) to change the General Partner (Concrete Equities) to a new General Partner. I was under the impression that was our legal right, but apparently the judge didn’t think so. The judge said that she didn’t think we (the Limited Partners) had enough financial information about the buildings to make an informed decisions. That’s true, we don’t – but that’s solely because Concrete Equities is refusing to turn over the financial information to us. So why not order Concrete Equities to turn over the records and let us go our seperate ways? Concrete Equities doesn’t own these properties, we do. What a mess.
Although this isn’t relevant to most readers of this blog, I feel it’s important that I chronicle the events that are happening now with Concrete Equities – because it doesn’t look like anyone else has a blog on which they are doing so. My intention isn’t to turn this into a “Concrete Equities Blog”, but since I have a rather large chunk of money invested with these guys, I think you can understand why this issue is important for me to track.
This morning I received an update from the President of Concrete Equities Inc., via email. If you’re an investor with Concrete Equities, please take the time to read through this discussion thread (UPDATE: it has since been deleted, but Google’s cached version has some of the info) – you’ll learn a great deal about your investment and the status of is. That thread is also where they announce meetings of investors. As for this message from the President of Concrete Equities, it’s hard for me to separate fact from fiction. I think the financials will reveal the truth in time. This is a long message – the first section is about the Mexico investment, of which we have a unit in Santa Clara, and the remainder of the email is about the Calgary investments (we have the Castleridge investment).
Dear El Golfo (Santa Clara) Investor,
At this time, our firm would like to update you on current developments on this particular project. El Golfo de Santa Clara region remains viable for future tourist development. Being the first point of beachfront on the Sea of Cortez along the coastal highway in the state of Sonora it is developing into a great drive-to destination for Americans. When the project began, the coastal highway was under construction and the international airport was being conceptualized. Since that time the coastal highway is near completion and the international airport to service El Golfo de Santa Clara and the Puerto Puenasco (Rockypoint) area is well underway. Also please keep in mind that your investment is a solid, equity based land hold with no mortgage or debt position on your asset. Continue reading A Status Update From Concrete Equities
On Monday, June the 1st, over 200 investors who gave their money to Concrete Equities took to the street to protest what the company has done. I wasn’t able to be a part of it, but I applaud all those who were there fighting for our collective investments. Today, June 4th, Concrete Equities is being challenged in court by the lawyer representing the investors. We’ll see what happens – my understanding is that even though three of the five groups of limited partners have legally voted out Concrete Equities and put a new General Partner in their place, Concrete Equities is refusing to accept the results of the vote and turn over the required control.
Here’s a round-up of some of the media coverage the protest received, and some photos from people who were there.
“A commercial investment dispute spilled onto a downtown street yesterday as more than 200 investors protested in front of the head office of the company at the centre of the dispute.”
– Calgary Metro News Story
“The trouble started in March when Concrete Equites, as general partner, asked the limited partners to sell all of their real estate to a new company in exchange for company shares. The limited partners didn’t bite and they say they then ousted concrete as general partner in 3 of the 5 partnerships but Concrete did not cede control and instead filed papers in bankruptcy court asking that a receiver be appointed. Now investors can only watch as this drama plays out in court.”
– CTV News Story
“A group of disgruntled investors will head to court this week in a bid to regain control of their properties from Concrete Equities, a Calgary-based commercial real estate fund. More than 200 people protested outside the company’s offices Monday, demanding three years’ worth of financial statements related to the ownership of five buildings downtown that were placed under receivership earlier this spring….Mitrovic said the properties, which include the SNC Lavalin building downtown, were intentionally placed under bankruptcy protection in a desperate bid to prevent the installation of a new general partner in accordance with a series of votes that won the overwhelming approval of investors.”
– Calgary Herald Story
A few more pictures of the protest after the break. Continue reading News Stories on Concrete Equities Protest
Well check this out – looks like I should have been checking up on Concrete Equities late last year:
“CALGARY, Dec. 23 /CNW/ – The Alberta Securities Commission (ASC) has concluded a settlement with Concrete Equities Executive Club Inc. regarding allegations that it breached Alberta securities laws. As of June 2, 2008, Concrete Equities Executive Club promoted and sold Class B shares to 18 Alberta investors, raising $1,620,000. Concrete Equities Executive Club admitted it breached Alberta securities laws when it engaged in an illegal distribution by distributing its Class B shares to 13 of these investors without a prospectus and without being registered to trade in them. Concrete Equities Executive Club paid $80,000 to settle the allegations and $2,000 toward investigation costs. In addition, Concrete Equities Executive Club has offered to recind and refund all investors who purchased its Class B shares and has undertaken to refund the investments of the 13 unqualified Alberta investors.”
A word to all investors: always do research on the companies you invest with, and the people who run them. Especially the people who run them!
UPDATE: I found a CTV News story on this.
This press release was sent out by the group of volunteers who are leading the charge on reclaiming our properties from Concrete Equities.
Limited Partners Fight for control of Concrete Equities Investments
Calgary, Alberta Canada, June 1st, 2009 – The ten member Steering Committee and supporting Limited Partners of five (05) commercial investment properties in the Calgary area met today to raise awareness to potential investors to business practices being conducted by Concrete Equities.
The group of investors represent a minimum individual investment ranging from $10,000 to $50,000 and are comprised of individuals from several demographics, including pensioners and people that rely on the distributions from the investments for their income. The net portfolio is valued at approximately $300 million CDN. Continue reading Limited Partners Fight for control of Concrete Equities Investments