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The following message was sent out last night by a money manager to his clients regarding the INTRUST matter. (I have removed references to his company.)
Bob Fulks
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Dear Investor:
PricewaterhouseCoopers LLP Conference Call Regarding InTrust - April 18,
2000
PricewaterhouseCoopers LLP initiated a conference call for Financial
Advisors on Tuesday afternoon, April 18, 2000. The purpose of this
conference call was to outline the status of the receivership,
Pricewaterhouse's current intentions, and to answer any questions the
Financial Advisors might have. Keep in mind that PricewaterhouseCoopers
LLP ("PW") has only been working on this since late Friday and has just
scratched the surface. Here are the highlights:
Q: What are PW's top priorities?
A: PW's top priorities are to find a buyer of InTrust, complete the
investigation re/ misappropriation of funds, & outline all possible ways
to recoup the loss.
Q: When does PW expect to find a buyer for InTrust?
A: PW expects that they will find a buyer within the next three weeks.
Q: What happens if PW doesn't find a buyer?
A: In due time, if PW can't possibly find a buyer for InTrust, the
assets would be moved out.
Q: What is the maximum exposure/dollar loss that we could ultimately
see?
A: Since PW has not reached a specific dollar loss, they couldn't answer
this.
Q: What was the balance in InTrust cash & InTrust's total asset balance
as of April 14, 2000?
A: InTrust cash was $100 million & InTrust's total asset balance was
$2.2 billion.
Q: Since our client assets were not invested in InTrust cash on April
14, 2000, shouldn't we be excluded from this loss?
A: PW stated that it was premature at this time to determine who would
(& wouldn't) be involved in absorbing this loss.
Q: Will we be able to continue trading our client's accounts?
A: Yes, effective Monday afternoon, all broker/dealers were informed
that investment advisors could trade their accounts, just not redeem any
funds.
Q: How long before the investment assets will be available for client
redemptions?
A: PW's preliminary estimate is two to three weeks.
Q: When can we expect to receive the March statements?
A: The March statements will not be going out at all - PW is not able to
accurately determine the InTrust cash balance that is necessary for
statements; PW is not sure at this time when the April statements will
go out.
Q: How will PW handle hardship cases that require a cash withdrawal?
A: Hardship cases will be handled/evaluated on a case-by-case basis; in
general, needs such as monthly income, taxes, & sudden hospitalization
were discussed.
Q: Can PW verify the exact $ amount that was misappropriated?
A: While both the Chicago Tribune & OBRE Commissioner believe that the
total $ amount misappropriated was $68 million, PW could only say that
$68 million was shown on InTrust's books to be misappropriated - PW has
no more knowledge at the time of the conference call that the $68
million figure is indeed correct.
Q: To what extent are the funds misappropriated by Intercounty Title
Company of Illinois insured?
A: PW is in the process of determining what insurance is in effect.
Q: Will the level of risk change for non-U.S. residents?
A: No, the level of risk should be the same for U.S. & non-U.S.
residents.
Q: Can PW cite a similar legal case & its outcome to give our investors
some idea/projection?
A: PW would not speculate.
Q: Since most of the questions asked could not be answered with a
definitive answer, will another conference call be scheduled?
A: PW did say that another conference call could be scheduled in the
near future as more information comes available.
Q: How will PW inform InTrust's clients about this change at InTrust?
A: PW will be sending out a letter to all of InTrust's clients by the
end of this week - the body of the letter is currently on InTrust's
website (www.intrust.com); further updates will also be posted on the
InTrust website.
Q: Have additional court dates been set up?
A: No more court dates have been set up to date; more definitive
information is needed by PW.
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