RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT	9 Months Ended
Sep. 30, 2013
RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT
RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT	NOTE E – RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT Prime Income Asset Management, Inc (“PIAMI”), a related party, is a real estate management company that also invests in real estate for its own account. PIAMI is indirectly owned by a private trust. URC Energy, Inc is and has been a significant investor in the Company. URC Energy, Inc is indirectly owned by a private trust. While the two trusts are separate they have similar trustees and beneficiaries and therefore the Company has noted PIAMI as a related party. Beginning in 2006 the Company made loans to certain related parties at interest rates higher than the Company believes it could have gotten elsewhere. For a more complete discussion of history of the receivable, the establishment of a reserve due to concerns regarding collectability if the receivable and the recovery efforts refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, in Item 13 on page 26 and Footnote C on page 45. In the fourth quarter of 2011 the Company determined that the financial condition of PIAMI had deteriorated and there could be no assurance that the amount owed would or could be collected. In 2011, the Company recorded a reserve of $10 million and fully reserved the receivable. Any future collections of the receivable will be reflected as income in the period in which it is collected. Beginning in 2011 the Company conducted business with Pillar Income Asset Management (“Pillar”), a related party, whereby Pillar would provide the Company with services including processing Payroll, acquiring insurance etc. The Company believes that by purchasing these services through certain large entities it can get lower costs and better service. Pillar has not charged the Company a fee for providing these services. While separate companies both PIAMI and Pillar are both owned by Realty Advisors, Inc. (“RAI”). During 2011 and 2012 the Company incurred obligations to Pillar totaling approximately $1.7 million. In a joint agreement among Pillar, PIAMI, RAI and the Company, Pillar agreed to relieve the Company of its obligation to pay $1.7 million and the Company agreed to reduce the amount owed by Prime by a like amount. In the third quarter of 2012 the Company recorded a $1.7 million gain on the transaction. In the fourth quarter of 2012 Pillar incurred expenses on behalf of the Company of $376,000 and agreed to forego payment in exchange for a reduction in the PIAMI obligation. The Company recorded an additional $376,000 gain. For the nine months ended September 30, 2013 Pillar incurred expenses on behalf of the Company of $1,143,000 and agreed to forego payment in exchange for a reduction in PIAMI obligation. The Company recorded an additional $1,143,000 gain.

RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT

9 Months Ended

Sep. 30, 2013

RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT

RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT

NOTE E – RECEIVABLE FROM PRIME INCOME ASSET MANAGEMENT

Prime Income Asset Management, Inc (“PIAMI”), a related party, is a real estate management company that also invests in real estate for its own account. PIAMI is indirectly owned by a private trust. URC Energy, Inc is and has been a significant investor in the Company. URC Energy, Inc is indirectly owned by a private trust. While the two trusts are separate they have similar trustees and beneficiaries and therefore the Company has noted PIAMI as a related party.

Beginning in 2006 the Company made loans to certain related parties at interest rates higher than the Company believes it could have gotten elsewhere. For a more complete discussion of history of the receivable, the establishment of a reserve due to concerns regarding collectability if the receivable and the recovery efforts refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, in Item 13 on page 26 and Footnote C on page 45.

In the fourth quarter of 2011 the Company determined that the financial condition of PIAMI had deteriorated and there could be no assurance that the amount owed would or could be collected. In 2011, the Company recorded a reserve of $10 million and fully reserved the receivable. Any future collections of the receivable will be reflected as income in the period in which it is collected.

Beginning in 2011 the Company conducted business with Pillar Income Asset Management (“Pillar”), a related party, whereby Pillar would provide the Company with services including processing Payroll, acquiring insurance etc. The Company believes that by purchasing these services through certain large entities it can get lower costs and better service. Pillar has not charged the Company a fee for providing these services.

While separate companies both PIAMI and Pillar are both owned by Realty Advisors, Inc. (“RAI”). During 2011 and 2012 the Company incurred obligations to Pillar totaling approximately $1.7 million. In a joint agreement among Pillar, PIAMI, RAI and the Company, Pillar agreed to relieve the Company of its obligation to pay $1.7 million and the Company agreed to reduce the amount owed by Prime by a like amount. In the third quarter of 2012 the Company recorded a $1.7 million gain on the transaction. In the fourth quarter of 2012 Pillar incurred expenses on behalf of the Company of $376,000 and agreed to forego payment in exchange for a reduction in the PIAMI obligation. The Company recorded an additional $376,000 gain.

For the nine months ended September 30, 2013 Pillar incurred expenses on behalf of the Company of $1,143,000 and agreed to forego payment in exchange for a reduction in PIAMI obligation. The Company recorded an additional $1,143,000 gain.