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):



	June 30, 2016		December 31, 2015
Receivables from managed entities and related parties, net:
Real estate investment entities	$	17,222	$	21,146
Commercial finance investment entity⁽¹⁾	—		1,289
Financial fund management investment entities	1,714		1,582
Other	178		319
RSO	2,126		2,331
Loan to CVC Credit Partners	2,730		—
Receivables from managed entities and related parties, net	$	23,970	$	26,667

Payables due to managed entities and related parties:
Real estate investment entities ⁽²⁾	$	4,330	$	3,110
Other	35		35
Payables to managed entities and related parties	$	4,365	$	3,145


(1)	Reflects the liquidation of the remaining LEAF Financial commercial lease investment partnership in May 2016 and the corresponding assumption of the fund's net assets, including the portfolio of leases and loans, in settlement of the receivable due from the fund.


(2)	Includes $4.2 million and $3.0 million in self-insurance funds provided by the Company's real estate investment entities as of June 30, 2016 and December 31, 2015, respectively, which are held in escrow by the Company to cover claims.

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						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Fees from unconsolidated investment entities:
Real estate ⁽¹⁾	$	1,365		$	1,774		$	4,521		$	3,891
Financial fund management	654			785			1,428			1,567
RSO:
Management, incentive and servicing fees	2,808			3,188			6,553			6,420
Dividends paid	300			458			600			916
Reimbursement of costs and expenses	1,599			1,642			2,636			2,713
CVC Credit Partners:
Reimbursement of net costs and expenses	127			246			346			475
Opportunity REIT I:
Fees	4,636			8,667			9,253			14,972
Reimbursement of costs and expenses	1,155			934			2,430			1,822
Dividends paid	44			29			88			44
Opportunity REIT II:
Fees	6,992			1,732			11,782			2,744
Reimbursement of costs and expenses	779			762			1,357			1,499
Dividends paid	21			13			41			20
Innovation Office REIT:
Reimbursement of costs and expenses	431			—			1,052			—
LEAF:
Payment for sub-servicing the commercial finance investment partnerships ⁽²⁾	—			(18		)	—			(41		)
Reimbursement of net costs and expenses	51			41			87			77
1845 Walnut Associates Ltd:
Payment for rent and related expenses	(214		)	(209		)	(428		)	(416		)
Property management fees	66			38			113			76
Brandywine Construction & Management, Inc.:
Payment for property management of hotel property	(89		)	(81		)	(141		)	(133		)
Atlas Energy, L.P.:
Reimbursement of net costs and expenses	24			11			53			24
Ledgewood P.C.:
Payment for legal services	(33		)	(55		)	(68		)	(89		)
Graphic Images, LLC:
Payment for printing services	(88		)	(36		)	(114		)	(84		)
9 Henmar LLC:
Payment of broker/consulting fees	(13		)	(14		)	(16		)	(17		)


(1)	Includes the reduction of discounts previously recorded of $136,000 and $130,000 for the three and six months ended June 30, 2016 and $3,000 and $210,000 and three and six June 30, 2015, respectively, in connection with management fees from the Company's real estate investment entities that have been received or are expected to be received sooner than originally projected.


(2)	The Company waived management fees from its commercial finance investment entities of $0 and $7,000 during the three and six months ended June 30, 2016 and $31,000 and $80,000 during the three and six months ended June 30, 2015.

Relationship with RSO. Since March 2005, the Company has had a management agreement with RSO pursuant to which it provides certain services, including investment management and certain administrative services, to RSO. The agreement, which had an original maturity date of March 31, 2009, continues to renew automatically for one-year terms unless at least two-thirds of the independent directors or a majority of the outstanding common shareholders agree to not renew it. The Company receives a base management fee, incentive compensation, property management fees and reimbursement for out-of-pocket expenses. The base management fee is equal to 1/12th of the amount of RSO’s equity, as defined by the management agreement, multiplied by 1.50%. In October 2009, February 2010 and March 2012, the management agreement was further amended such that RSO directly reimburses the Company for the wages and benefits of RSO's chief financial officer as well as an executive officer who devotes all of his time to serve as RSO’s chairman of the board, and a sufficient number of accounting professionals, each of whom will be exclusively dedicated to RSO's operations (number and amounts charged are reviewed and approved by RSO's Board of Directors), and a director of investor relations who is 50% dedicated to RSO's operations. In August 2010, the agreement was further amended to reduce the incentive management fee earned by the Company for any fees paid directly by RSO to employees, agents and/or affiliates of the Company with respect to profits earned by a taxable REIT subsidiary of RSO.

The Company earned a $2.3 million structuring and placement fee for underwriting a European CLO with a total par value of €413.0 million for an unrelated third-party collateral manager. RSO purchased €12.5 million of the subordinated note tranche of this CLO.

Relationship with Opportunity REIT I. As of June 30, 2016 and December 31, 2015, the Company had a receivable/ (prepayment) of $(106,000) and $277,000, respectively, from Opportunity REIT I for reimbursement of operating costs and expenses.

Relationship with Opportunity REIT II. As of June 30, 2016 and December 31, 2015, the Company had a receivable of $205,000 and $4.9 million, respectively, from Opportunity REIT II for offering costs and operating expense reimbursements.

Relationship with Innovation Office REIT. As of June 30, 2016 and December 31, 2015 the Company had a receivable of $4.3 million and $2.4 million, respectively, from the Innovation Office REIT for reimbursement of offering costs and expenses.

Relationship with Resource Apartment REIT III. As of June 30, 2016 and December 31, 2015 the Company had a receivable of $1.4 million and $739,000, respectively, from the Resource Apartment REIT III for reimbursement of offering costs and expenses.

Relationship with CVC Credit Partners. On January 13, 2016, the Company entered into a new loan agreement with CVC Credit Partners which provides for borrowings of up to €3.6 million with interest accruing at the Euro Interbank Offered Rate ("EURIBOR") plus 7%. In February 2016 and March 2016, CVC Credit Partners borrowed a total of €2.4 million under this new loan. The Company has consulted with hedging and derivative professionals and has utilized hedging instruments in order to minimize FX exposure.

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. In December 2014, the Company amended the terms of the note to provide for an initial repayment of $50,000 plus accrued interest, which was paid on March 15, 2015. The remaining principal and interest was repaid in full prior to the final due date on March 8, 2016.