Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

Discontinued Operations

6.     Discontinued Operations

        During the third quarter of 2012, the Company committed to a plan to sell Legend. On October 29, 2012, the Company signed a definitive agreement with First Allied Holdings Inc. to sell all of the common interests of Legend Group Holdings, LLC and the sale closed effective January 1, 2013. Based on the value of the consideration the Company expected to receive upon closing, which is less than the carrying value of net assets to be sold, the Company recorded a non-cash impairment charge of $42.4 million, which is reflected in income (loss) from discontinued operations on the statement of income. The consideration received was subject to working capital and regulatory capital adjustments through the closing date. The Company retained $7.7 million of Legend's excess working capital as part of the agreement. The agreement also includes an earnout provision based on asset retention for a period of two years following the closing date.

        The operational results of Legend have been presented as discontinued operations in the consolidated financial statements for all periods presented. Legend's revenues and income (loss) before provision for income taxes follow:

	2012		2011		2010
	(in thousands)
Revenues	$	74,033		72,644		66,619
Income (loss) before provision for income taxes	$	(40,518)		5,810		6,123

        For income tax purposes, the sale will result in a $48.3 million capital loss that may only be utilized to offset future capital gains. Due to the character of the loss and the limited carry forward period permitted by law, the Company may not realize the full tax benefit of the capital loss.

        The assets and liabilities of Legend, classified as discontinued operations held for sale in the consolidated balance sheets are as follows:

	December 31, 2012		December 31, 2011
	(in thousands)
Assets
Cash and cash equivalents	$	2,303		3,167
Cash and cash equivalents - restricted		401		13
Investment securities		1,352		1,235
Receivables		10,345		9,871
Prepaid expenses and other current assets		749		615
Total current assets		15,150		14,901
Property and equipment, net		992		885
Goodwill		16,868		59,241
Other non-current assets		150		148
Total non-current assets		18,010		60,274
Total assets		33,160		75,175
Liabilities
Accounts payable		464		-
Accrued compensation		6,243		5,812
Other current liabilities		880		738
Total current liabilities		7,587		6,550
Non-current liabilities		281		207
Total liabilities		7,868		6,757
Assets less liabilities	$	25,292		68,418