General and Administrative Expenses

3 Months Ended

Mar. 31, 2013

General And Administrative Expenses

General and Administrative Expenses

Note 7. General and Administrative Expenses

As a result of our Investment Management Business Sale, the operating expenses related to our investment management business have been reclassified to income (loss) from discontinued operations on our consolidated statements of operations. See Note 1 for further discussion of the Investment Management Business Sale. General and administrative expenses included in net income from continuing operations for the three months ended March 31, 2013 and 2012 consisted of the following ($ in thousands):

	Three Months Ended March 31,
General and Administrative Expenses	2013		2012
Professional services	$	639	$	256
Operating and other costs		436		594
Subtotal		1,075		850
Non-cash personnel costs
Management incentive awards plan - CT Legacy Partners (1)		963		(282	)
Employee stock-based compensation		—		129
Subtotal		963		(153	)
Expenses of consolidated securitization vehicles		—		59
Total	$	2,038	$	756

(1) Represents the accrual of amounts payable under the CT Legacy Partners management incentive awards during the period. See Note 3 for discussion of the CT Legacy Partners management incentive awards plan.

In conjunction with the Investment Management Business Sale, we entered into a new management agreement with our Manager, which was amended and restated as of March 26, 2013, pursuant to which our Manager earns a base management fee in an amount equal to the greater of (a) $250,000 per annum and (b) 1.50% per annum multiplied by our outstanding Equity balance, as defined in the management agreement with our Manager. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (a) 20% and (b) the excess of (i) our Core Earnings (as defined in the management agreement) for the previous 12-month period (or the period since January 1, 2013, whichever is shorter) and (ii) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period (or the period since the date of the first offering of our class A common stock following December 19, 2012, whichever is shorter) is greater than zero. Core

Earnings is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items and (ii) the net income (loss) related to our legacy portfolio. During the three months ended March 31, 2013, we incurred $63,000 of management fees payable to our Manager, which are included in general and administrative expenses.