HLD Land Development Limited Partnership Units V.HLD.UN

Good Thinking

[HLDpropmngr]

Update: The Management Discussion & Analysis is being finalized so that the 2005 Financial Statements can be posted soon at www.sedar.com Shareholders’ equity is $17,580,164, with 13,886,316 partnership units issued - a present value before costs of liquidation of just over $1.26 per Unit. The offer proposes to pay $1.02 in cash, or debentures that pay from $1.39 to $1.51 per partnership Unit over a maximum 7 year term. Rather than accepting the offer Captain Billy feels it is preferable to hold on as long as it takes. I applaud his courage and hope other Partners are willing to buy more Units so that HLD can be re-capitalized without significant dilution. For the record I do agree that Acquireco would have a better chance than HLD of being profitable because their adjusted cost base for the inventory would be under $20 million while the HLD Partnership’s is now about $30 million and climbing. From the exact same properties HLD must make at least $10 million more than Acquireco just to break even. And it must attempt to accomplish this without the $4 million in back-up capital Acquireco would have, without support from a related mortgage financing company, without investing in above-ground construction, and without being able to invest in any new projects. That’s why the former directors have made their offer, not because they have any ‘inside information’. Of course The Falls is the ultimate wildcard that could easily crush Acquireco, and that’s why they may not feel they are able to proceed even if the vote is Yes. All the more reason to appreciate those Partners like Captain Billy who are prepared to keep reinvesting for as long as possible. Best Regards, Michael