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Related Party Transactions
12 Months Ended
Dec. 31, 2017
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions

Related party transactions must be reviewed and approved by the Audit Committee of the Company’s board of directors when not conducted in the ordinary course of business subject to the standard terms of the Company’s lending marketplace or certificate investment program. Any material amendment or modification to an existing related party transaction is also subject to the review and approval of the Audit Committee. Related party transactions may include any transaction between entities under common control or with a related person that has occurred since the beginning of the Company’s latest fiscal year or is currently proposed. The Company has defined related persons as members of the board of directors, executive officers, principal owners of the Company’s outstanding stock and any immediate family members of each such related person, as well as any other person or entity with significant influence over the Company’s management or operations.

Several of the Company’s executive officers and directors (including immediate family members) have made deposits and withdrawals to their investor accounts and purchased loans, notes and certificates or have investments in private funds managed by LCAM. The Company believes all such transactions by related persons were made in the ordinary course of business and were transacted on terms and conditions that were not more favorable than those obtained by similarly situated third-party investors.

In October 2017, LCAM initiated the full wind down of six funds by redeeming the certificates issued by the funds and transferring the loan participations underlying the redeemed certificates to third-party investors. The redemptions of the certificates of $386.1 million to certificate holders were transacted on terms and conditions that were not more favorable than those observed by similarly situated third-party investors. See “Note 5. Loans Held For Investment, Loans Held For Sale, Notes, Certificates and Secured Borrowings and Loan Servicing Rights” and “Note 14. Secured Borrowings” for additional information.

On April 1, 2016, the Company closed its $10.0 million investment in the Investment Fund, a holding company that participates in a family of funds with other unrelated third parties and purchases whole loans and interests in loans from the Company. As of December 31, 2017, the Company and Mr. John Mack, one of the Company’s board members, had an ownership interest of approximately 25% and 1%, respectively, in the Investment Fund. At December 31, 2017, the Company’s investment was $10.0 million, which is recognized in “Other assets” on the Company’s Consolidated Balance Sheets.

During 2017, this Investment Fund purchased $53.3 million of whole loans and interests in whole loans. During 2017, the Company earned $734 thousand in investor fees from this family of funds, and paid interest of $7.4 million on interests in whole loans to the family of funds. The Company believes that the sales of whole loans and interests in whole loans, and the investor fees charged were on terms and conditions that were not more favorable than those obtained by other third-party investors.

During 2016, this Investment Fund purchased $256.7 million of whole loans and interests in whole loans. During 2016, the Company earned $1.8 million in investor fees from this family of funds, and paid interest received from the borrowers of the underlying loans of $8.6 million to the family of funds. The Company believes that the sales of whole loans and interests in whole loans, and the servicing and management fees charged were on terms and conditions that were not more favorable than those obtained by other third-party investors.