CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

3 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In the ordinary course of its business operations, the Company has sponsored and manages investment entities.  Additionally, it has ongoing relationships with several related entities.  The following table details these receivables and payables (in thousands):

	December 31, 2012		September 30, 2012
Receivables from managed entities and related parties, net:
Commercial finance investment entities (1)	$	10,644	$	13,904
Real estate investment entities (2)	18,107		18,247
Financial fund management investment entities	1,736		2,193
RSO	8,020		6,555
Other	178		152
Receivables from managed entities and related parties	$	38,685	$	41,051
Payables due to managed entities and related parties, net:
Real estate investment entities (3)	$	3,300	$	3,900
Other	267		480
Payables to managed entities and related parties	$	3,567	$	4,380

(1) Includes $29.6 million of reserves for credit losses related to management fees owed from three commercial finance investment entities that, based on changes in the estimated cash distributions, are not expected to be collectible.

(2) Includes $2.5 million of reserves for credit losses related to management fees owed from two real estate investment entities that, based on projected cash flows, are not expected to be collectible.

(3) Includes $3.2 million in funds provided by the real estate investment entities, which are held by the Company to self insure the properties held by those entities.

The Company receives fees, dividends and reimbursed expenses from several related/managed entities.  In addition, the Company reimburses related entities for certain operating expenses.  The following table details those activities (in thousands):

	Three Months Ended December 31,
	2012			2011
Fees from unconsolidated investment entities:
Real estate(1)	$	4,017		$	3,768
Financial fund management	760			850
Commercial finance (2)	—			—
RSO:
Management, incentive and other fees	4,849			3,830
Dividends paid	534			631
Reimbursement of costs and expenses	1,160			705
CVC Credit Partners – reimbursement of net costs and expenses	216			—
RRE Opportunity REIT:
Reimbursement of costs and expenses	75			105
LEAF:
Payment for sub-servicing the commercial finance investment     partnerships	(382		)	(405		)
Payment for rent and related expenses	(197		)	(120		)
Reimbursement of net costs and expenses	59			60
1845 Walnut Associates Ltd. – payment of rent and operating expenses	(154		)	(106		)
Brandywine Construction & Management, Inc. – payment for property management of hotel property	(54		)	(59		)
Atlas Energy, L.P.– reimbursement of net costs and expenses	144			169
Ledgewood P.C. – payment for legal services	(53		)	(155		)
Graphic Images, LLC – payment for printing services	(27		)	(8		)
The Bancorp, Inc. – reimbursement of net costs and expenses	28			45
9 Henmar, LLC – payment of broker/consulting fees	(19		)	(18		)

(1) Includes discounts recorded by the Company of $538,000 and $76,000 recorded in the three months ended December 31, 2012 and 2011 in connection with management fees from its real estate investment entities that it expects to receive in future periods.

(2) During the three months ended December 31, 2012 and 2011, the Company waived $751,000 and $1.5 million, respectively, of fund management fees from its commercial finance investment entities.

Purchases of related party trading securities. The Company engages in structured finance security trading, both as an agent, through through the Company's registered broker-dealer subsidiary, Resource Securities, Inc. ("Resource Securities"), and for the Company. During the three months ended December 31, 2012, the Company purchased $5.9 million notional value of notes of Alesco Financial, Inc. ("Alesco") for $239,000 which were sold for a gain of $121,000 during the three months ended December 31, 2012. Alesco merged with Cohen & Company, Inc. in December 2009 which then changed its name to Institutional Financial Markets, Inc. ("IFMI") in January 2011. Mr. Daniel G. Cohen, is the CEO and Chief Investment Officer of IFMI and is the brother of the Company's CEO, Mr. Jonathan Z. Cohen, and the son of Mr. E. Cohen, the Company's Chairman.

Relationship with Brandywine Construction & Management, Inc. (“BCMI”).  BCMI manages the property underlying one of the Company’s real estate investments.  Mr. E. Cohen is the chairman of BCMI.

In November 2012, the Company paid a $95,000 fee to BCMI in connection with the negotiations and ultimate sale of a property in which the Company had a loan investment.

Advances to Affiliated Real Estate Limited Partnership. During fiscal 2011, the Company agreed to advance up to $3.0 million to an affiliated real estate limited partnership under a revolving note, bearing interest at the prime rate.  Amounts drawn, which are due upon demand, were $2.5 million and $2.4 million as of December 31, 2012 and September 30, 2012, respectively, which are included in Receivables from Managed Entities and Related Parties, net of allowance for credit losses. The Company recorded $18,000 and $16,000 of interest income on this loan during the three months ended December 31, 2012 and 2011, respectively. Based on projected collectability concerns, determined by applying current asset values, these amounts have been fully reserved.