An exculpatory, fact based, look at the structure of the syndicated mortgages that in part funded Fortress projects. This website provides a detailed look at the documents & disclosure that outlined fees, risks, relationships and roles – https://t.co/HVp0YJMCHv

A statement from the counsel for Mr. Petrozza:

A statement from the counsel for Mr. Rathore:

Details matter. We will continue to provide stewardship for the best exit of projects possible. Commentary on two other exits is forthcoming. / 12

We hoped for a better outcome on this project for all parties. Delayed approvals and other market forces were certainly factors. A higher payout was offered last year but was challenged in court by investors. Everyone is entitled to their own opinion, but not their own facts/11

This link takes you to a concise, clear and easily navigable exculpatory website that breaks down the numerous disclosures and risk notices that were provided to all SMLs https://t.co/HVp0YJMCHv /10

“Speculative.” “High Degree of Risk.” “Risks of delayed payments.” “Repayment being at risk.” These are all noted by the judge in just ONE paragraph of his decision. Details matter. And risks were outlined in several different documents./9

And “The development of a project may not be completed within the anticipated time frame, or at all, which in turn could delay payment to participants or put payment at risk.”/ 8

Let’s look at paragraph 48: Dr. Pizutto’s own evidence includes copies of documents that he received that warned him that “Investments in syndicated mortgages are speculative and involve a high degree of risk” /7

The judge notes *specific* disclosures of costs, equity, fees and “how the loan proceeds... would be applied”. He also notes that the investor’s own evidence included  Multiple documents that warned him of risk. / 6

The Project Fact Sheet also described the distribution of revenue in accordance with the Waterfall provision, including principal equity advances pari passu, with a direction to refer to the Loan Agreement for “in-depth details.”/ 5

Specifically, the Project Fact Sheet disclosed the repayment of 50% of the Borrower’s equity; the payment toward the Borrower’s project costs; and the payment of the Development Consultant’s fees. /4

Here is paragraph 46 from the judge’s decision: 46, In fact, Dr. Pizzuto received many documents relating to his investment. Apart from the Loan Agreement, Dr. Pizzuto would have received documents indicating how the loan proceeds of $21,256,153 would be applied./3

@VOSMI1 The footer of that term sheet includes clear language that “Final Terms and Conditions can be found in the loan agreements”. These details matter. /2

Hi @VOSMI1, ‘secured’ refers to the investment being registered & secured against the land. Evidence of this securitization was provided to each SML via the Land Registry Office. /1

Gaging suitability was the responsibility of provincially licensed third parties and never under the purview of Fortress. More information can be found here

Our portfolio has successfully generated 40+ exits for over half a billion dollars. Certain projects have had challenges that were largely due to adverse market conditions or the insolvency of the original developer/borrower. But disclosures were always in the agreements.

The Investors or their advisors could have easily requested a copy. Dr. Pizzuto was also provided with a document summarizing the Waterfall provision.

[47] While Emerald admits that Dr. Pizzuto may not have been provided a copy of the DCA, it submits that it was not hidden from him. I agree. There are several references to it in the Loan Agreement and in an Acknowledgement that Dr. Pizzuto signed.

He noted that multiple references were made to all agreements in a variety of executed documents and that even a summary of commercial terms was provided.

Failure by one party to read (or understand) an agreement, but then acknowledge that it has been reviewed and accepted, is not a basis to claim concealment. This was pled by an investor and the judge did not agree.