I read that as well...don't know what to think
Dear Tree Owners,
Thank you to so many of you for your heartwarming and kind messages about Steve’s passing. This is a very difficult time for our family and we appreciate your kindness, support and prayers.
After sending my e-mail a few weeks ago about Steve, much work has been accomplished. However, there is still a great deal of work to do. Steve was not only a principal of the company, he was the visionary. He had the vision of all the elements of our business and how to move everything forward. With Steve’s battle with cancer over the past two years, and in his weakened condition, especially in the final months of his life, the details of his plan were not always able to be executed.
With the loss of Steve, we are making every effort to shore up and reorganize the company as quickly as possible with limited funds and a reduced staff.
The following is an update:
Flooding:
As we have reported, the past rainy seasons in the area of our farms have been unusually intense, causing us to close the farms to visits and suspend thinnings.
The rains in late 2011 were especially prolonged, causing serious flooding and damage. More than 60,000 acres of land in Costa Rica was flooded by rivers or inundated from the intense rains. Unfortunately, that includes parts of several of our farms.
Because of the reduced staff on the farms, we don’t have specific reports back from all the farms, but it appears that the flooding and prolonged inundations have affected thousands of the trees.
To help explain the situation on our specific farms, rocks and material from slides upstream from our farms have filled some of the river courses and the rivers have spread out into the neighboring farms, in many cases sweeping away land, buildings, and trees. Fields bordering on the rivers at Campo Real, Santo Domingo, Capital, San Rafael, and Rio Blanco have largely all been affected. Also, some fields at San Rafael , Pilar and Salamá have areas that suffered from the water not draining fast enough. Mudslides are also always an isolated risk on any of the sloped areas on any of the farms.
Heart Rot in Older Trees:
We have recently discovered heart rot in some of the older trees. The standing trees from outward appearance appear to be strong and healthy and it is not until the tree is cut that the heart rot is exposed. We are working as quickly as possible to assess this situation and salvage as many of the trees as possible.
Thinnings:
You will recall that we suspended thinnings in 2009 when the lumber market fell due to the changes in the world economy.
Even with the fall in the lumber market, it has been recommended that we recommence thinnings on a limited scale. We are working very quickly to conduct thinnings on farms before the heavy rains begin again.
Please do keep in mind that, as we have written in several issues of our Tree Owners News, the young wood from the early thinnings has little or no value.
Future Plantings:
Future tree plantings have been suspended so that we can concentrate completely on thinnings, farm clean up, and reorganization.
May 18, 2012 Tico Times Article:
As I was preparing to send this Tree Owner update, The Tico Times published an article critical of TATF and I will attempt to briefly address the major concerns here.
Investment projections and other claims – At no time did TATF promise investment returns. We provided projections, but no guarantees. We made clear that early thinnings would have little if any commercial value. Our website does not claim that our company is one of the largest teak growers in Costa Rica .
Distributions to Tree Owners – Contrary to what the article states, TATF has in fact issued approximately $1.6 million in distributions to Tree Owners.
Number of Tree Owners – The article correctly states that we had over 3,000 individuals, companies and trusts enlisted in the project in 2007. The number of new Tree Owners did not thereafter grow appreciably due largely to untrue propaganda that began appearing on a website known as InvestorsHub, which frightened away new potential investors. The misinformation, which was largely fomented by one of our competitors in the teak business (without disclosing that fact), severely damaged our company’s good reputation. This occurred as Steve was fighting his first battle with cancer. We lacked the time, energy and financial resources to mount a legal challenge against these slanderous attacks. At least one of the parties responsible for this effort to undermine our company, I believe, was a source for The Tico Times article.
Ownership of farms – We have always accurately represented the number and size of our tree farms. Some of them are titled through corporations other than TATF S.A.
Issues with Caja – We have always attempted to comply with all Costa Rica laws and regulations, especially in regard to our employees. We have in fact had a long-running dispute with the Caja over underpayment of withholding taxes. The problem began when a trusted senior employee of ours who was responsible for making those payments failed to do so, and never informed us. When we found out, we immediately terminated him from our employment and have sought to resolve the issue with the government. Interest on the disputed sum has accrued while our lawyers have tried to negotiate a settlement of the government’s claims. There is no denying that our dispute with the Caja has caused operational problems for us. In his final months Steve was attempting to obtain a loan in order to settle the Caja’s claim, but was unable to do so.
Individual complaints - I will not address publicly the complaints of the individual Tree Owners who are quoted in the article. While there is some validity to what some of them have stated, they also contain some misleading inaccuracies. For example, one of the complaining Tree Owners refused to communicate with us by e-mail, as we repeatedly requested, in order to reduce the likelihood of misunderstandings between us. Another Tree Owner never actually paid for her trees as she claimed, but was given credit for them. Another failed to mention that he has received several thousands of dollars from TATF. Another did not mention that he is a business competitor of TATF.
Poor communications – This, I am sad to say, is a valid criticism. As mentioned, we have been operating our business in a difficult economy, with very limited staff, dwindling financial resources, and under the duress of Steve’s two bouts with cancer. His poor health and my attention to his recovery are the major reasons why we got so far behind. For this I sincerely apologize.
Full Disclosure:
I am scheduled to inspect many of our farms with our advisors in the upcoming weeks. I will make as many visits as possible, but I just learned that my trip will have to be cut short because I, too, have been diagnosed with cancer. In caring for Steve over the last year, I neglected my own health, but am now scheduled to undergo surgery in the United States . I am hopeful of a good prognosis.
I will remain in consultation with advisors and will continue to write with updates as they are available. I ask for your prayers, your understanding and support, and your continued patience.
Warm regards,
Sherry
Sherry Brunner
Tropical American Tree Farms
