NOTE 20 - 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,
	2011		2010
Receivables from managed entities and related parties, net:
Commercial finance investment entities (1)	$	29,725	$	41,722
Real estate investment entities (2)		19,796		18,491
Financial fund management investment entities		2,652		3,065
RCC		2,539		2,811
Other		103		327
Receivables from managed entities and related parties	$	54,815	$	66,416

Payables due to managed entities and related parties, net:
Real estate investment entities	$	1,010	$	122
RCC		222		34
Payables to managed entities and related parties	$	1,232	$	156

(1)

Reflects $8.3 million of reserves for credit losses related to management fees owed from two commercial finance investment entities that, based on a change in estimated cash distributions, are not expected to be collectible. Also includes a discount of $293,000 in connection with management fees and reimbursed expenses that the Company expects to receive in the future.

(2)	Reflects $2.2 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.

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):

	Years Ended September 30,
	2011			2010			2009
Fees from unconsolidated investment entities:
Real estate (1)	$	13,480		$	12,637		$	11,343
Financial fund management (2)		4,391			3,445			3,105
Commercial finance (3)		−			10,637			20,168
RCC:
Management, incentive and servicing fees (4)		12,270			10,938			8,361
Dividends		2,455			2,278			3,405
Reimbursement of costs and expenses		2,688			1,794			600
Resource Real Estate Opportunity REIT, Inc. – reimbursement of costs and expenses		1,843			1,824			−
Atlas Energy, L.P.– reimbursement of net costs and expenses		1,070			871			1,369
1845 Walnut Associates Ltd. – payment of rent and operating expenses		(706	)		(567	)		(475	)
Ledgewood P.C. – payment for legal services		(555	)		(295	)		(549	)
Graphic Images, LLC – payment for printing services		(111	)		(94	)		(133	)
9 Henmar LLC – payment of broker/consulting fees		(50	)		(55	)		(81	)
The Bancorp, Inc. – reimbursement of net costs and expenses		34			−			−

(1)	Reflects discounts recorded by the Company of $512,000, $463,000 and $394,000 recorded in fiscal 2011, 2010 and 2009 in connection with management fees from its real estate investment entities that it expects to receive in future periods.

(2)	For fiscal 2010, excludes a $2.3 million gain on the repurchase of limited partner interests in two of the Trapeza partnerships. For fiscal 2009, excludes a $1.7 million reduction in the Company's clawback liability associated with two Trapeza partnerships.

(3)	During fiscal 2011, 2010 and 2009, the Company waived $8.1 million, $3.8 million and $425,000, respectively, of its fund management fees from its commercial finance investment entities, respectively.

(4)	Included in fiscal 2009 is a $180,000 fee the Company received from RCC related to a one-day $4.5 million loan, which was repaid in full.

Relationship with RCC. Since March 2005, the Company has had a management agreement with RCC pursuant to which it provides certain services, including investment management and certain administrative services for RCC. The agreement, which had an original maturity date of March 31, 2009, continues to automatically renew 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 RCC's equity, as defined by the management agreement, multiplied by 1.50%. In October 2009 and January 2010, the management agreement was further amended such that RCC will directly reimburse the Company for the wages and benefits of its chief financial officer, an executive officer who devotes all of his time to serve as RCC's chairman of the board, and three accounting professionals, each of whom will be exclusively dedicated to the operations of RCC, and a director of investor relations who will be 50% dedicated to RCC'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 RCC to employees, agents and/or affiliates of the Company with respect to profits earned by a taxable REIT subsidiary of RCC.

In February 2011, the Company entered into a services agreement with RCC to provide subadvisory collateral management and administrative services for five CDOs holding approximately $1.7 billion in bank loans whose management contracts RCC had acquired. In connection with the services provided, in February 2011 the management agreement was further amended to permit RCC to pay the Company 10% of all base and additional collateral management fees and 50% of all incentive collateral management fees it collects and reimburse its expenses relative to the management of these CDOs.

On July 20, 2011, RCC agreed to provide LEAF with up to $10.0 million in debt financing, of which $6.9 million was funded as of September 30, 2011. The loan bears interest at a fixed rate of 8.0% per annum on the unpaid principal balance, payable quarterly. In conjunction with the November 2011 LCC Transaction, the loan was settled (see Note 27).

In January 2010, RCC advanced $2.0 million to the Company under an 8% promissory note that matures on January 14, 2015. Interest is payable quarterly in arrears and requires principal repayments upon the receipt of distributions from one of the Company's real estate investment entities.

LEAF Financial originated and managed commercial finance assets on behalf of RCC prior to the formation of LEAF in January 2011. The leases and loans were typically sold to RCC at fair value plus an acquisition fee of 1% in addition to a 1% fee to then service the assets. During fiscal 2011, LEAF Financial sold $2.3 million of leases and loans to RCC prior to the formation of LEAF. During fiscal 2010, LEAF Financial sold approximately $116.0 million of leases and loans to RCC for which LEAF Financial did not receive acquisition or servicing fees and, accordingly, recognized a loss of $7.5 million, consisting of an estimated loss reserve of $3.0 million (up to a maximum of approximately $5.9 million of delinquent assets could be returned), a servicing liability of $2.5 million and a $2.0 million write-off of previously unreimbursed capitalized costs associated with the portfolio. During fiscal 2010, LEAF Financial also sold an additional $10.3 million of leases and loans to RCC. In fiscal 2009, LEAF Financial sold $6.1 million of leases and loans to RCC. In addition, from time to time, LEAF Financial repurchased leases and loans from RCC at a price equal to their fair value as an accommodation under certain circumstances, which include the consolidation of multiple customer accounts, originations of new leases when equipment is upgraded and facilitation of the timely resolution of problem accounts when collection is considered likely. LEAF Financial repurchased $0, $140,000 and $1.4 million of leases and loans from RCC during fiscal 2011, 2010 and 2009, respectively.

In June 2009, one of LEAF Financial's investment partnerships acquired net assets of $89.8 million, primarily a pool of leases, and assumed $82.3 million in related debt from a subsidiary of RCC. No gain or loss was recognized by any of the parties on the acquisition or sale. In relation to this transaction, the Company owed $7.5 million to RCC under a promissory note bearing interest at LIBOR plus 3%. In addition, the Company was due $3.0 million from the investment partnership for this transaction. The note was repaid in full to RCC and the Company received full repayment from the investment partnership in August 2009.

In December 2009, the Company recorded an adjustment of $200,000 ($173,000 net of tax) related to equity-based compensation expense for previously issued RCC restricted stock and options awarded to members of the Company's management. The Company determined that the amounts that related to prior fiscal years and quarters were immaterial to all prior fiscal years and quarters, including the impact on earnings per share and, therefore, recognized the full adjustment during the first quarter of fiscal 2010. Additionally, the impact on full-year net earnings for fiscal 2010 was immaterial.

Resource Securities has periodically facilitated transactions on behalf of RCC. No fees have been charged by Resource Securities related to these transactions.

Transactions between LEAF Financial and its investment entities. LEAF Financial originates and manages leases and loans on behalf of its investment entities (collectively, the “LEAF Funds”) for which it also is the general partner. The leases and loans are sold to the LEAF Funds at fair value plus an origination fee not to exceed 2%. During fiscal 2011, 2010 and 2009, LEAF Financial sold $821,000, $65.9 million and $275.2 million, respectively, of leases and loans to the LEAF Funds. In addition, from time to time LEAF Financial repurchases leases and loans from the LEAF Funds. During fiscal 2010 and 2009, LEAF Financial repurchased $0, $6.0 million and $1.2 million, respectively, of leases and loans from the LEAF Funds at a price equal to their fair value.

Relationship with Resource Real Estate Opportunity REIT, Inc. (“RRE Opportunity REIT”). The Company formed RRE Opportunity REIT in fiscal 2009 and the registration statement for this fund became effective with the United States Securities and Exchange Commission in June 2010. The Company is entitled to receive reimbursements for costs associated with the formation and operating expenses of RRE Opportunity REIT. As of September 30, 2011, the Company had a $3.9 million receivable due from RRE Opportunity REIT.

On June 17, 2011, the Company loaned $1.4 million to RRE Opportunity REIT at a rate of interest of 6.5% with a maturity of six months. The loan was repaid on June 28, 2011, along with related interest.

Relationship with Atlas Energy, L.P. (“Atlas”). Mr. E. Cohen is the Company's Chairman of the Board and is the chief executive officer (“CEO”) and president of the general partner of Atlas, and Mr. Jonathan Z. Cohen (“Mr. J. Cohen”), the Company's CEO and President, is the general partner's chairman of the board. Atlas subleases office space from the Company and also reimburses the Company for certain shared services. At September 30, 2011, the Company had a $79,000 receivable balance from Atlas.

Relationship with 1845 Walnut Associates Ltd. The Company owns a 5% investment in a real estate partnership that owns a building at 1845 Walnut Street, Philadelphia in which the Company also leases office space. In February 2009, the Company amended its lease for its offices in this building to extend the lease termination date through May 2013, with an option to extend the term for up to 15 additional years. The property is managed by another related party, Brandywine Construction and Management, Inc. (“BCMI”), as further described below.

Relationship with Ledgewood P.C.(“Ledgewood”). Until March 2006, Mr. Jeffrey F. Brotman was the managing member of Ledgewood, which provides legal services to the Company. Mr. Brotman remained of counsel to Ledgewood through June 2007, at which time he became an Executive Vice President of the Company. In addition, Mr. Brotman was a trustee of the SERP retirement trusts until he joined the Company. In connection with his separation, Mr. Brotman will receive payments from Ledgewood through 2013.

Mr. E. Cohen, who was of counsel to Ledgewood until April 1996, receives certain debt service payments from Ledgewood related to the termination of his affiliation with Ledgewood and its redemption of his interest in the firm.

Relationship with Graphic Images, LLC (“Graphic Images”). The Company utilizes the services of Graphic Images, a printing company, whose principal owner is the father of the Company's Chief Financial Officer. For fiscal 2011, 2010 and 2009, the Company paid to Graphic Images $111,000, $94,000 and $133,000, respectively.

Relationship with retirement trusts. The Company has established two trusts to fund the SERP for Mr. E. Cohen. The 1999 Trust, a secular trust, purchased 100,000 shares of the common stock of TBBK ($716,000 fair value at September 30, 2011). See “Relationship with TBBK,” below. This trust and its assets are not included in the Company's consolidated balance sheets. However, trust assets are considered in determining the amount of the Company's liability under the SERP. The 2000 Trust, a “Rabbi Trust,” holds 33,509 shares of common stock of TBBK carried at fair value ($240,000 at September 30, 2011). The carrying value of all of the assets in the 2000 Trust was $243,000 and $878,000 at September 30, 2011 and 2010, respectively. The Company intends to sell the remaining assets in the Rabbi 2000 Trust in order to fund future benefit payments. The SERP liability of $7.0 million is included in accrued expenses and other liabilities.

Relationship with 9 Henmar LLC (“9 Henmar”). The Company owns interests in the Trapeza entities that have sponsored CDO issuers and manage pools of trust preferred securities acquired by the CDO issuers. The Trapeza entities and CDO issuers were originated and developed in large part by Mr. Daniel G. Cohen (“Mr. D. Cohen”). The Company agreed to pay Mr. D. Cohen's company, 9 Henmar, 10% of the fees the Company receives, before expenses, in connection with the first four Trapeza CDOs that the Company sponsored and manages. In fiscal 2011, 2010 and 2009, the Company paid 9 Henmar $50,000, $55,000 and $81,000, respectively.

Relationship with TBBK. Mr. D. Cohen is the chairman of the board and Mrs. Betsy Z. Cohen, (“Mrs. B. Cohen”, who is the wife of Mr. E. Cohen (Mr. E. Cohen and Mrs. B. Cohen are the parents of Messrs. J. Cohen and D. Cohen) is the CEO of TBBK and its subsidiary bank. Beginning in June 2011, the Company sublet a portion of its New York office space to TBBK. In fiscal 2011 and 2009, the Company sold 90,210 and 99,318 of its shares of TBBK common stock for $790,000 and $601,000, respectively, and realized a gain of $186,000 and a loss of $393,000, respectively. The Company did not sell any of its TBBK stock during fiscal 2010. In addition, TBBK provides banking and operational services for LEAF Financial. During fiscal 2011, 2010 and 2009, LEAF Financial paid $5,000, $13,000, and $57,000, respectively, in fees to TBBK. Additionally, the Company held cash deposits of $41,000 and $31,000 at TBBK at September 30, 2011 and 2010, respectively.

Relationship with certain directors, officers, employees and other related parties. The Company serves as the general partner of seven partnerships that invest in regional domestic banks. The general partner may receive a carried interest of up to 20% upon meeting specific investor return rates. Some of the partnerships' investors wanted to ensure that certain individuals who are critical to the success of the partnerships participate in the carried interest. The total participation authorized by the Company's compensation committee was 48.5% of the 20% carried interest, of which Mr. J. Cohen is entitled to receive 10%. Nine individuals, five of whom are employees of the Company, are entitled to receive the remaining 38.5%. No carried interest has been earned by any of the individuals through September 30, 2011.

Relationship with Brandywine Construction & Management, Inc. (“BCMI”). BCMI manages the properties underlying three of the Company's real estate loans and certain other real estate assets. Mr. Adam Kauffman, president of BCMI, or an entity affiliated with him, has also acted as the general partner, president or trustee of one of the borrowers on the loans. Mr. E. Cohen is the chairman of BCMI.

During fiscal 2009, the Company paid a $90,000 fee to BCMI in connection with the final resolution of one of its legacy real estate assets.

In March 2008, the Company sold a 19.99% interest in an indirect subsidiary that holds a hotel property in Savannah, Georgia to a limited liability company owned by Mr. Kauffman for $1.0 million plus $130,000 in fees, and recognized a gain of $612,000. The terms of the sale agreement provide for a purchase option by Mr. Kauffman to purchase up to the balance of the Company's interest in the hotel for $50,000 per 1% interest purchased. The purchase option expired in July 2011. Mr. Kauffman now has a right-of-first-offer to purchase the balance of the Company's interest in the hotel.

During fiscal 2011, the Company agreed to increase its advances to an affiliated real estate limited partnership under a revolving note to $3 million (from $2.0 million), bearing interest at the prime rate. Amounts drawn, which are due upon demand, were $2.2 million and $1.6 million as of September 30, 2011 and 2010, respectively.