Dear Unitholders,

We are aware of a recent article published by the Globe and Mail, on October 8, 2024, which reported that Agence du revenu du Québec (“RQ”) exercised a search warrant at the offices of Romspen Investment Corporation (“Romspen”), as part of RQ’s investigation into unpaid taxes by a group of related companies, many of whom (“Borrowers”) were recipients of mortgage loans from the Romspen Mortgage Investment Fund (the “Fund”). 

We have not commented until now as we wanted to ensure that we remained compliant with certain legal requirements. While we must exercise discretion due to the nature of the proceedings, as a valued investor in the Fund, we felt it important to keep you informed of this ongoing matter before you encounter any out-of-context narratives in the public domain. 

Since 2019, Romspen has been fully cooperative with RQ’s investigation, providing extensive information and documentation on the Borrowers’ loans. The Borrowers involved went through a number of public court-supervised insolvency proceedings, during which Romspen exercised its rights as a prudent lender. RQ was notified and had the opportunity to participate in these proceedings, which resulted in judgments that authorized the sales of the Borrowers’ real estate assets that RQ did not contest or appeal. 

The Borrowers’ corporate directors, who were personal guarantors of the loans, also filed proposals under the Bankruptcy and Insolvency Act that listed the unpaid corporate sales taxes as liabilities. These proposals were approved by their creditors, including Romspen and RQ. 

We were shocked by RQ’s recent actions, especially given our history of voluntary cooperation with RQ’s investigations. Today, we filed an application in Quebec court to terminate or vary the court order that sealed the information forming the basis for the search warrant. We will evaluate the potential for further action as this matter evolves.

The Fund has no assets remaining on its balance sheet related to the Borrowers, and all of their real estate assets have been sold and proceeds received under a court-supervised process.

We remain committed to transparency and will provide further updates as soon as we are able. 

We appreciate your continued support and trust. 

Sincerely,
Romspen Investment Corporation