XML 57 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2012
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

NOTE 6.         RELATED PARTY TRANSACTIONS AND FEES

 

The Advisory agreement provides for Pillar or a related party of Pillar to receive fees and cost reimbursements as defined in Part III, Item 10. “Directors, Executive Officers and Corporate Governance – The Advisor”.  Cost reimbursements are allocated based on the relative market values of the Company’s assets. The Company and Pillar entered into an Advisory Agreement and Cash Management Agreement to further define the administration of the Company’s day-to-day investment operations, relationship contacts, flow of funds and deposit and borrowing of funds.  Prime served as the Company’s contractual Advisor and Cash Manager from July 1, 2009 through April 30, 2011. 

 

 

The fees and cost reimbursements paid to Pillar, Prime, TCI and related parties are detailed below (dollars in thousands):

 

Fees:

 

 

2012

 

 

2011

 

 

2010

 

 

Advisory fee

 

 

815

 

 

 

850

 

 

$

866

 

 

Net income fee

 

 

180

 

 

 

54

 

 

 

99

 

 

Construction managmeent fee

 

 

-

 

 

 

-

 

 

 

2

 

 

Tax sharing agreement

 

 

839

 

 

 

647

 

 

 

-

 

 

 

 

$

1,834

 

 

$

1,551

 

 

$

967

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost reimbursements

 

 

155

 

 

 

206

 

 

 

178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

 

-

 

 

 

-

 

 

 

313

 

 

Interest received

 

$

2,695

 

 

$

1,756

 

 

$

1,755

 

 

 

 

 

2,695

 

 

 

1,756

 

 

 

2,068

 



 

As of December 31, 2012, IOT has notes and interest receivable of $27.0 million due from Unified Housing Foundation, Inc. and recognized interest income of $2.5 million related to these notes receivable.  Unified Housing also paid in full a $3.0 million note receivable during the twelve months ended December 31, 2012.  See details in Part 2, Item 8. “Note 3. Notes and Interest Receivable”.

 

The following table reconciles the beginning and ending balances of amounts receivable from related parties as of December 31, 2012 dollars in thousands):

 

 

 

TCI

 

 

Pillar

 

 

Total

 

Balance, December 31, 2011

 

$

52,160

 

 

$

-

 

 

$

52,160

 

Cash transfers

 

 

-

 

 

 

3,578

 

 

 

3,578

 

Advisory fees

 

 

-

 

 

 

(815

)

 

 

(815

)

Net income fee

 

 

-

 

 

 

(180

)

 

 

(180

)

POA fees

 

 

-

 

 

 

(61

)

 

 

(61

)

Cost reimbursements

 

 

-

 

 

 

(155

)

 

 

(155

)

Expenses paid by advisor

 

 

-

 

 

 

257

 

 

 

257

 

Financing (mortgage payments)

 

 

-

 

 

 

(1,364

)

 

 

(1,364

)

Proceeds from note receivable

 

 

-

 

 

 

3,258

 

 

 

3,258

 

Interest income

 

 

1,118

 

 

 

1,577

 

 

 

2,695

 

Tax Sharing Expense

 

 

(839

)

 

 

-

 

 

 

(839

)

Purchase of obligation

 

 

6,095

 

 

 

(6,095

)

 

 

-

 

Balance, December 31, 2012

 

$

58,534

 

 

$

-

 

 

$

58,534

 

 

IOT is part of a tax sharing and compensating agreement with respect to federal income taxes between ARL, TCI and IOT and their subsidiaries that was entered into in July of 2009.  That agreement continued until August 31, 2012 at which time a new tax sharing and compensating agreement was entered into by TCI, ARL, IOT and RAMI for the remainder of 2012.  The expense (benefit) in each year was calculated based on the amount of losses absorbed by taxable income multiplied by the maximum statutory tax rate of 35%.  IOT paid TCI $839,000 in 2012 and $647,000 in 2011 for the tax sharing agreement.