Mortgage Portfolio

12 Months Ended

Dec. 31, 2011

Mortgage Loans On Real Estate [Abstract]

Mortgage Loans On Real Estate Disclosure [Text Block]

4. Mortgage Portfolio

The Company’s mortgage portfolio includes the following categories of notes receivable: Mortgage Portfolio Held for Sale and Net Mortgage Portfolio. At December 31, 2011 and 2010, all of the notes in the Company’s mortgage portfolio are current in accordance with their terms, as modified, except the $750,000 note which has been classified as impaired (see below).

Mortgage Portfolio Held for Sale

On February 27, 2009, the Company completed a settlement agreement with The Lightstone Group (“Lightstone”) (“Settlement Agreement”) and David Lichtenstein regarding various claims the Company had asserted against them. Under the terms of the Settlement Agreement, an affiliate of Lightstone, which was the debtor on an existing loan from the Company in the outstanding principal amount of $2,074,994, assumed $10,000,006 of indebtedness under the $9,500,000 and the $8,600,000 mezzanine loans due from Lightstone. The total indebtedness was consolidated into a nonrecourse loan in the outstanding principal amount of $12,075,000 (the “Consolidated Note”). The Consolidated Note was secured by all of the ownership interests in entities owning nine apartment properties (1,056 apartment units) located in Virginia (which had previously secured the $2,074,994 indebtedness) and 75% of the ownership interests in entities owning nine additional apartment properties (931 apartment units) located in Virginia and North Carolina. The Consolidated Note accrued interest at the rate of 13% per annum and was due on February 1, 2012.

The Company believed that the monthly interest due on the $2,074,994 portion of the note would be paid in accordance with the terms of the note and, as a result, the Company accrued the interest on this portion of the note. For the year ended December 31, 2011 and 2010, the Company received the interest due on the note of $187,000 and $273,495, respectively. The interest due on the $10,000,006 portion of the note was recorded in income on a cash basis as interest was received and the balance of the interest due on the $10,000,006 was deferred and was to be due at maturity of the note. For the year ended December 31, 2010, the Company received $331,064 of interest payments on this portion of the Consolidated Note and, at December 31, 2010, the unaccrued deferred interest was $2,016,550.

The Company marketed the Consolidated Note and/or a sale of the apartment properties underlying the Consolidated Note beginning in the third quarter of 2010. Although there was interest in a sale of the Consolidated Note or the underlying collateral from several potential purchasers, it became apparent to us that the value of the Company’s Consolidated Note was substantially less than originally estimated.

Mortgage Portfolio Held for Sale (Continued)

On April 14, 2011, the Company sold the Consolidated Note to another affiliate of Lightstone for $5,500,000. In connection with the sale Presidential paid a brokerage commission of $150,000 to a broker unaffiliated with either Presidential or Lightstone and incurred additional expenses of $10,282. The net proceeds from the sale of the note were $5,339,718.

Net Mortgage Portfolio

Under the terms of the Settlement Agreement, the Company also received a $750,000 non-interest bearing, nonrecourse note from Mr. Lichtenstein originally due on January 31, 2010, which is secured by a 25% ownership interest in IATG Puerto Rico, LLC (“IATG”) (see Note 5). In May, 2010, the Company extended the maturity date of the note to December 31, 2010 and received a $10,000 fee. The note matured on December 31, 2010. Payment on the note was not received and, as a result, in 2010 the Company recorded a $750,000 valuation reserve for the $750,000 non-interest bearing, nonrecourse note and classified the note as impaired at December 31, 2011 and 2010.

For the year ended December 31, 2011 and 2010, the Company recognized in interest income $0 and $8,329, respectively, of the amortization of discount recorded on the note receivable.

The following tables summarize the components of the net mortgage portfolio:

	Notes Receivable
				Cooperative
	Impaired			Apartment
December 31, 2011	Loans			Units (1)			Total
Notes receivable	$	750,000		$	45,268		$	795,268
Less:  Valuation reserve		(750,000	)					(750,000	)
Discounts					(14,898	)		(14,898	)
Net	$			$	30,370		$	30,370
Due within one year	$	-		$	12,590			12,590
Long-Term		-			17,780			17,780
Net	$	-		$	30,370		$	30,370

				Cooperative
	Impaired			Apartment
December 31, 2010	Loans			Units (1)			Total
Notes receivable	$	750,000		$	61,210		$	811,210
Less:  Valuation reserve		(750,000	)		-			(750,000	)
Discounts		-			(19,255	)		(19,255	)
Net	$	-		$	41,955		$	41,955
Due within one year	$	-		$	18,126		$	18,126
Long-term		-			23,829			23,829
Net	$	-		$	41,955		$	41,955

(1) Notes receivable from sales of cooperative apartment units. These notes generally have market interest rates and the majority of these notes amortize monthly with balloon payments due at maturity.

Note Receivable – Related Party

Presidential had two nonrecourse loans (the “Ivy Consolidated Loan”), which it received in 1991 from Ivy Properties, Ltd. and its affiliates “(Ivy”). At December 31, 2011 and 2010 the Ivy Consolidated Loan had a net carrying value of zero.

In connection with the Plan of Liquidation, the unaffiliated directors approved an agreement with the principals of Scorpio Entertainment, Inc. (“Scorpio”), a company owned by two of the Ivy principals, whereby they would acquire, or cause the acquisition of, the Ivy Consolidated Loan for $100,000. On November 8, 2011, the Company assigned the Ivy Consolidated Loan to an individual employed in the theater industry for $100,000. For the year ended December 31, 2011, the Company received payments of $11,750 from Scorpio, which were recorded as interest income.