Commitments And Contingencies

6 Months Ended

Jun. 30, 2011

Commitments And Contingencies

Commitments And Contingencies

NOTE 14: COMMITMENTS AND CONTINGENCIES

Riverside National Bank of Florida Litigation

On August 6, 2009, Riverside National Bank of Florida commenced a lawsuit which named as defendants the three major credit rating agencies, various CDO sellers and collateral managers, including our subsidiary, Taberna Capital Management, LLC. The suit was filed in the Supreme Court of the State of New York, Kings County, and subsequently discontinued without prejudice and refiled in New York County on November 13, 2009. On April 16, 2010, the Office of the Comptroller of the Currency closed Riverside and named the Federal Deposit Insurance Corporation as receiver and thus as successor-in-interest to Riverside as plaintiff in the action, and the defendants subsequently removed the case to the United States District Court for the Southern District of New York. On April 22, 2011, following a series of stays requested by the FDIC, the FDIC voluntarily dismissed the action without prejudice. The claims asserted in this action were described in RAIT's annual report on Form 10-K for the year ended December 31, 2010. RAIT believes that the FDIC plans to file a new lawsuit pursuing the same or substantially similar claims against an expanded list of defendants. If the FDIC files such a lawsuit, an adverse resolution of the litigation could have a material adverse effect on our financial condition and results of operations.

Routine Litigation

We are involved from time to time in litigation on various matters, including disputes with tenants of owned properties, disputes arising out of agreements to purchase or sell properties and disputes arising out of our loan portfolio. Given the nature of our business activities, these lawsuits are considered routine to the conduct of our business. The result of any particular lawsuit cannot be predicted, because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system. We do not expect that the liabilities, if any, that may ultimately result from such routine legal actions will have a material adverse effect on our consolidated financial position, results of operations or cash flows.