Note 4 - Related Party Transactions

9 Months Ended

Oct. 31, 2012

Related Party Transactions Disclosure [Text Block]

4. RELATED PARTY TRANSACTIONS

Between August 28, 2012 and August 30, 2012, the Trust purchased 31.5 units at $10,000 per unit from Rare Earth Financial. The Trust paid $315,000 in cash to settle the transaction. The purchase agreement allows the Trust to return the 31.5 units to Rare Earth at the original purchase price anytime before September 1, 2013.

As of October 31, 2012, the Trust had notes receivable agreements with Rare Earth Financial and three hotels, affiliates of Mr. Wirth. The notes bear interest at 7.0% per annum and are interest only quarterly payments. On October 31, 2012 the balance of the notes was $307,006. Subsequent to October 31, 2012, Rare Earth Financial and two of the hotels paid their notes in full. One affiliate hotel has a remaining balance of $135,000. This hotel executed a note with the Trust requiring certain payments during the term of the note, which matures March 31, 2013. The note bears interest at 7.0% on the unpaid balance beginning January 1, 2013.

As of October 31, 2012 and 2011, Mr. Wirth and his affiliates held 3,407,938 Class B limited partnership units in the Partnership. As of October 31, 2012 and 2011, Mr. Wirth and his affiliates held 5,573,624 Shares of Beneficial Interest of the Trust.

The Trust recognized related party payroll reimbursement revenue and related payroll expense to Mr. Wirth and his affiliates in the amounts of $0 and $1,647,584 for the nine months ended October 31, 2012 and 2011, respectively. As of February 1, 2012, the employees of each hotel at which they work are employees of the hotel and the hotels are responsible for their employee payrolls.

See Note 6 – “Sale of Membership Interests in Albuquerque Suite Hospitality, LLC”, Note 7 – “Sale of Partnership Interests in Tucson Hospitality Properties, LP” and Note 8 – “Sale of Partnership Interests in Ontario Hospitality Properties, LP” for additional information on related party transactions.