NOTE 15 - 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):



	September 30, 2014		December 31, 2013
Loans and receivables from managed entities and related parties, net:
Real estate investment entities	$	27,346	$	21,487
Commercial finance investment entities ⁽¹⁾	2,403		8,174
Financial fund management investment entities	497		1,138
Other	429		124
Loan to CVC Credit Partners	1,962		—
Receivables from managed entities and related parties	$	32,637	$	30,923

Payables due to managed entities and related parties, net:
Real estate investment entities ⁽²⁾	$	3,580	$	2,940
Other	115		170
Payables to managed entities and related parties	$	3,695	$	3,110


(1)	Net of reserves for credit losses of $32.5 million and $36.2 million as of September 30, 2014 and December 31, 2013, respectively, related to management fees due from certain of the Company's commercial finance investment entities that, based on estimated cash distributions, are not expected to be collectible.


(2)	Reflects $3.4 million and $2.9 million in funds provided by the real estate investment entities as of September 30, 2014 and December 31, 2013, respectively, 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						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Fees from unconsolidated investment entities:
Real estate ⁽¹⁾	$	8,992		$	6,726		$	26,436		$	16,273
Financial fund management	794			801			2,861			2,335
Commercial finance ⁽²⁾	—			—			—			—
CVC Credit Partners – reimbursement of net costs and expenses	211			295			836			979
RRE Opportunity REIT I:
Reimbursement of costs and expenses	641			204			1,556			605
Dividends paid	30			28			88			85
RRE Opportunity REIT II:
Reimbursement of costs and expenses	642			—			1,590			—
LEAF:
Payment for sub-servicing the commercial finance investment partnerships	(52		)	(197		)	(253		)	(743		)
Payment for rent and related expenses	—			(144		)	—			(543		)
Reimbursement of net costs and expenses	31			53			95			168
1845 Walnut Associates Ltd:
Payment for rent and related expenses	(154		)	(286		)	(561		)	(476		)
Property management fees	56			32			149			149
Brandywine Construction & Management, Inc. – payment for property management of hotel property	(57		)	(54		)	(169		)	(167		)
Atlas Energy, L.P. – reimbursement of net costs and expenses	52			49			124			243
Ledgewood P.C. – payment for legal services	(98		)	(76		)	(165		)	(180		)
Graphic Images, LLC – payment for printing services	(27		)	(20		)	(116		)	(59		)
The Bancorp, Inc. – reimbursement of net costs and expenses	29			29			84			85
9 Henmar LLC – payment of broker/consulting fees	(3		)	(4		)	(21		)	(24		)


(1)	Reflects discounts recorded by the Company of $38,000 and $112,000 for the three and nine months ended September 30, 2014, respectively, and $56,000 and $169,000 for the three and nine months ended September 30, 2013, respectively, in connection with management fees from its real estate investment entities that it expects to receive in future periods.


(2)	During the three and nine months ended September 30, 2014, the Company waived $105,000 and $605,000, respectively, and $410,000 and $1.5 million, respectively, during the three and nine months ended September 30, 2013, of its fund management fees from its commercial finance investment entities.

On February 6, 2014, Opportunity REIT II commenced its initial public offering of up to $1.0 billion in common stock at a maximum price of $10 per share. Opportunity REIT II will focus on acquiring under-performing multifamily rental properties, distressed real estate and performing loans. Resource Real Estate, a subsidiary of the Company, is the external manager. As of September 30, 2014, the Company had a $3.1 million receivable due from Opportunity REIT II for offering costs and operating expense reimbursements.

On June 14, 2014, the Company provided a $1.3 million short-term bridge loan to Opportunity REIT II with interest accruing at a rate of LIBOR plus 300 basis points. The loan and related interest were repaid in full by June 30, 2014.

On May 6, 2014, the Company made a €1.5 million bridge loan to CVC Credit Partners with interest accruing at a rate of the Euro Interbank Offered Rate ("EURIBOR") plus 7%. In September 2014, the Company and CVC agreed to extend the maturity of the note until April 2015.

Advances to Real Estate Limited Partnership. During 2011, the Company agreed to increase its advances to an affiliated real estate limited partnership under a revolving note to $3.0 million (from $2.0 million), bearing interest at the prime rate. Amounts drawn, which are due upon demand, were $2.3 million as of September 30, 2014 and December 31, 2013, respectively, which are included in Loans and Receivables from Managed Entities and Related Parties, net of allowance for credit losses. The Company recorded $19,000 and $56,000 of interest income on this loan during the three and nine months ended September 30, 2014, respectively, and $17,000 and $53,000 during the three and nine months ended September 30, 2013, respectively.

In February 2014, the Company loaned a non-executive employee $300,000 under a promissory note bearing interest at 3-month LIBOR plus 3%, resetting annually. Principal and interest are payable annually commencing January 15, 2015 with equal payments due on each payment date with a final maturity of January 15, 2016.

In March 2014, pursuant to a guarantee agreement, the Company made a payment to the lender of one of its commercial finance investment partnerships. In making the payment, the Company assumed the rights of the lender, with the resulting note being collateralized by the portfolio of leases and loans held by the partnership. Effective July 31, 2014, the partnership was liquidated and the Company assumed the portfolio in settlement of the outstanding loan receivable

In July 2014, the Company and certain of its employees, together with RSO, purchased a portfolio of securities for $23.5 million. The portfolio, held by a subsidiary of RSO, is managed by the Company.