I think the agreement is between UDF and Centaurion (meaning all the UDF funds)
and the wording is that some of the loans are going into 7% per year from 1/1/17.
it states that its effective date is as of 12/31/20, but it does not say until when the
rate is reduced. the agreement (according to the "communications") says that
Centaurion will bring additional $175M of collateral that UDF agrees is qualified
and valued at that price. until such collateral is added, personal guarantee of
Centaurion's owner will exist (I think $10M). Nexpoint in its lawsuit claims that
the personal guarantee was released, so I assume the collateral was added.
I would love to know what is the amount of principal subjected to the 7% rate
and how much remains at the 13%. I did a small calculation to figure out the
interest rate on the loans since 2017 (based on interest income vs average
notes balance of the current year and previous one):
2017 = $31M / (($376.7M + $368M) / 2) = 8.30%
2018 = $29.6M / (($376.9M + $376.7M) / 2) = 7.85%
2019 = $32.4M / (($350M + $376.9M) / 2) = 8.90%
2020 = $24.2M / (($330.5M + $350M ) / 2) = 7.11%
2021 = $28.1M / (($259.3M + $330.5M) / 2) = 9.53%
This is more than 7% and less than 13%. that tells me that the notes subjected
to the 7% are going away. the big problem I see here is the $60M excess in
g&a (probably due to legal fees). its probably $70M on top of high g&a to
begin with (the fund is hardly active since 2016 and except for directors, the
staff should be the managers' staff).
To be fair, to me the 2021 look like someone took out any possible issue and
wrote it off (as far as book), but you can not write off cash expenses of $70M
where a lot of it has to do with defending people not employed by the fund,
without fiduciary duties to the fund and according to the results, based their
legal fight on misrepresented facts. the trustees who oversaw that do have a
fiduciary duty here and are in a problem. do they have o&d insurance?
last thing - how do you audit 2022 without having audited beginning balances?
that is a problem. does the state accept such reports?
AI
