XML 55 R19.htm IDEA: XBRL DOCUMENT
v2.4.1.9

COMMITMENTS AND CONTINGENCIES | 12 Months Ended
--- | ---
Dec. 31, 2014
Commitments and contingenciestextblock |
Commitments Contingencies | NOTE 12. COMMITMENTS, CONTINGENCIES AND LIQUIDITY Litigation The Company and its subsidiaries, from time to time, have been involved in various items of litigation incidental to and in the ordinary course of its business and, in the opinion of management; the outcome of such litigation will not have a material adverse impact upon the Company’s financial condition, results of operations or liquidity. In 2005, IOT purchased 10.08 acres of land, located in Dallas County, Texas, from TCI, a related party, and obtained 3 rd party financing. On August 2, 2011, the property was sold to ABCLD Real Estate, LLC ("ABCLD"), a related party. Ownership of this property was subsequently transferred from ABCLD to the lender through foreclosure procedures. On April 27, 2012, ABCLD filed a lawsuit for wrongful foreclosure against the lender. On September 9, 2014, the court entered a final judgement declaring that the foreclosure was void as a matter of law. ABCLD subsequently paid $7 million to get the property back. The plaintiffs appealed the final judgement and also allege that ABCLD and other various entities are still responsible for deficiencies, unpaid interest and related attorney fees. With the $7 million that was applied to the outstanding loan balance, the potential loss is significantly reduced, and the amount of final damages is contingent upon the outcome of the appeal. In the event of an unfavorable outcome, we believe the potential loss should be no more than $2 million. At this time, it is unknown as to the amount of damages and deficiency balances that the plaintiff will be entitled to recover, if any. Further, if there is any future obligations, it is unknown what the Company’s portion would be. ART and ART Midwest, Inc. In August 2014, David M. Clapper and two entities related to Mr. Clapper (all, collectively, the “Clapper Parties”) filed a complaint in the U. S. District Court against the Company, its directors and certain of its officers alleging purported transactions to the detriment of the Clapper Parties and others by transferring assets, cash and diverting property. Management of the Company believes that there is no basis for this action against the Company and its officers and directors and intends to vigorously defend itself. The August 2014 complaint does not allege any facts relating to the Company, except that the named directors and officers are directors and officers of the Company and that the Company is a Nevada corporation, with its headquarters/principal place of business in Dallas, Texas. The case arises over other litigation, commenced in 1999, among the Clapper Parties and American Realty Trust, Inc. (“ART”) and its former subsidiary, ART Midwest, Inc., originally arising out of a transaction in 1998, in which ART and the Clapper Parties were to form a partnership to own eight residential apartment complexes. Over the ensuing years, a number of rulings, both for and against ART and ART Midwest, Inc., were issued, resulting in a ruling in October 2011, under which the Clapper Parties were awarded an initial judgment for approximately $74 million, including $26 million in actual damages and $48 million in interest. The 2011 ruling was only against ART and ART Midwest, Inc., but no other entity. During February 2014, the Court of Appeals affirmed a portion of the judgment in favor of the Clapper Parties but also ruled that a double counting of a significant portion of the damages had occurred and remanded the case back to the trial court to recalculate the damage award, as well as pre- and post-judgment interest thereon. ART was also a significant owner of a partnership interest in the partnership that was awarded the initial damages in the matter. ART and ART Midwest, Inc. are not and have never been subsidiaries of the Company. Liquidity Management anticipates that IOT will generate excess cash from operations in 2015 due to the interest collected from notes receivable; however, such excess may not be sufficient to discharge all of IOT’s debt obligations as they mature. Management intends to reduce its cash invested with its Advisor to meet its cash requirements not funded through operations.

X
- Details
Name: | fil_CommitmentAndContingenciesAbstract
Namespace Prefix: | fil_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for commitments, contingencies, and guarantees. + References No definition available. + Details
Name: | us-gaap_CommitmentsContingenciesAndGuaranteesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration