Variable Interest Entity (VIE)

6 Months Ended

Nov. 30, 2011

Variable Interest Entity (VIE)

Note 2.    Variable Interest Entity (VIE)

The consolidated financial statements of Greystone include Greystone Real Estate, L.L.C. (“GRE”), a VIE which owns two buildings located in Bettendorf, Iowa which are leased to Greystone Manufacturing, L.L.C. (“GSM”), and until August 31, 2011, GLOG Investment, L.L.C. (“GLOG”), a VIE whose sole asset was Greystone’s Series 2003 Convertible Preferred Stock in the face amount of $5,000,000 and accrued dividends of $2,762,944. The assets and liabilities of GLOG were transferred to GLOG’s owners and GLOG was dissolved effective September 20, 2011, thereby removing the requirement for Greystone to consolidate GLOG.  Greystone initially became the primary beneficiary of GLOG’s variable interests on March 15, 2011, when a bank loan amendment caused Greystone’s assets to be included as collateral for GLOG’s indebtedness. Greystone’s assets continue to serve as collateral for the bank loan after it was assumed by GLOG’s owners.  The effect of GLOG’s dissolution was the deconsolidation to remove GLOG’s debt and to restore Greystone’s preferred stock and accumulated dividends payable to Greystone’s consolidated financial statements.