July 11, 2024 – Below is Viceroy’s third letter to Arbor’s auditor Ernst & Young regarding their ongoing lack of concern around Arbor’s financials. In particular:
- The continued decline in the performance of their CLO loans, which closely mirror those on Arbor’s balance sheet.
- Arbor’s use of modifications and extentions of unrecoverable loans to hide delinquencies
- The use of lender-favorable mezzanine financing to cosmetically rehabilitate their loans, effectively round-tripping.
It is our view that E&Y have consistently failed to act in their capacity as auditor to assure that Arbor’s financial statements are free of material mistatements.