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Circular 110 / 1.12.2005 / Exiting LODGE Partnerships. Deadline for decision to participate in this CGM-organised group exit is 5.00pm on Friday 23rd December 2005. You also have the option to exit at any time in the future that suits yourself subject to agreement with your fellow partners (see below). EXITING THE LODGE PARTNERSHIPS Following a successful 18 month process during which Clifden Glen Management (2005) Plc (or "CGM") has purchased all the key infrastructural assets at Clifden Glen including almost 200 acres of lands and dealt with all major matters relating to ownership and management of Clifden Glen two issues remain to be addressed by Lodge partners: 1) should Lodge partners remain within the partnerships or purchase their designated properties? This is the main purpose of this document. 2) who should replace the general partner now that Telcorglen Ltd has resigned and has advised it is going into voluntary liquidation in January 2006. [The formal appointment of a new managing partner will be dealt with separately in correspondence direct to each partner from the partnership solicitors, KMB.] This circular is sent to ALL 68 partners, including the 6 partners who are NOT shareholders in CGM. The Tax and Legal Opinion in relation to exiting the partnership, obtained by CGM on behalf of its shareholders, is ONLY made available to our members whose money paid for these opinions. Therefore, only 62 copies of the Tax and Legal opinions are circulated. Accordingly, the 6 non-shareholders should get their own Tax and Legal opinions. This paper represents the last two major 'corporate' initiatives by CGM. As soon as this matter is sorted in early 2006 then CGM will settle down to running and improving the site at Clifden Glen. There are 68 Lodges owned by partnerships. You are a member of one of the following partnerships. Partnership Properties Designated Lodge Properties Non-shareholders are identified above in brackets. You have the option to remain within the partnership indefinitely or, subject to agreement with your partners, you could opt to retire as a partner at any time in the future that suits you. You do not necessarily have to exit at this time. However, CGM is organising a group exit scheme for shareholders at this time and is offering shareholders the option to participate in this process if that is your wish. Even if you don't exit now as a shareholder you already own the garden site and driveway surrounding your designated Lodge and you are a shareholder in the management company with an independent site management agreement. Your overall title is fine though somewhat complex as you remain as owner of a partnership interest NOT an individual property when it comes to the actual footprint on which the Lodge is built. [The six non-shareholders do not own their garden site and do not have an independent site management agreement with CGM.] Exiting partners will have to pay ALL outstanding monies owed to their partnership and also indemnify the remaining partners in relation to any further tax that might become due for the period when they were a partner. This provides 100% comfort to the remaining partners. OPTION 2 / Exit the Partnership You can ask the partnership to sell your designated property to you (by way of a deed of partition) so the Lodge becomes registered (freehold) in your name. You can simplify your title by merging the footprint of the Lodge with the garden site to create a single folio and we have discussed this with the Land Registry. To exit you will incur legal fees on the sale and purchase (estimate €2k), you will have to crystallise VAT (estimate €14k which you may decide to reclaim or not following reading the Tax Opinion included in shareholders' packs) and CGT (likely to be from €1k to €3k) and you will have to clear your current account if it is in deficit with your partnership. You will also have to indemnify your partnership against any future tax claims that might arise in respect of the period when you were a partner or as a result of your exit but this should not be a problem as the sale valuation is based on a number of arms length transactions that went through in November 2005. These transactions clearly set a valuation. [A valuation from Sherry FitzGerald is also included for the benefit of shareholders as an appendix to the Tax Opinion.] KMB will represent the Partnerships in the exit process. You can appoint 1) your own solicitor to purchase the property into your
own name or 2) you can appoint GMB (Gleeson McGrath Baldwin Solicitors)
who are solicitors to CGM. See their letter attached. If you decide to exit you must 1) instruct KMB and 2) instruct your own solicitor in writing to begin the process. Please also advise CGM by email (team@clifdenglen.net) or fax at 022 23 980 so we know what happening. If you want to be part of this proposed CGM-organised group exit you must make up your mind and advise CGM before Friday 23rd December 2005. Instruction documents are included in this package. DISSOLUTION OPTION In the unlikely event that all partners in a partnership decide to exit then that partnership is likely to be dissolved as part of the exit process. This will remove the need for a deed of indemnity as all costs will be discharged upon dissolution and shared among the partners. FACILITATING THE EXITS UNDER EXISTING POWER OF ATTORNEY. CGM and KMB Solicitors are in a position to facilitate all who wish to exit under the Power of Attorney (PoA) granted to it to allow sales to complete without all partners having to attend and sign documentation. The PoA was granted for a year. RECOMMENDATION - STAY OR EXIT? CGM respects those who wish to remain as partners and those who wish to exit. Going forward CGM is pleased to deal with partnerships and individuals. To assist shareholders CGM includes the following documentation in this pack: - Letter from our solicitors, Gleeson McGrath Baldwin (with attachments)
*** *** ONLY included in packs going to shareholders. These opinions do not take peoples specific / personal circumstances on board and are for general guidance only. Each partner is in a different financial situation and must take their own advice and make up their mind accordingly. Legal Documents Issued by: Clifden Glen Management (2005) Plc Telephone 022 23 989 Fax 022 23 980 Email team@clifdenglen.net Main Telephone Contacts: Gerry Murphy, Clifden Glen Management (2005) Plc 086 2563 813 Management time: 10 hours Click here to return to the Noticeboard list.
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