Investments

9 Months Ended

Sep. 30, 2011

Equity Method Investments and Joint Ventures [Abstract]

Investments in and Advances to Affiliates [Text Block]

Note 8 – Investments

The Company’s investments as at September 30, 2011 and December 31, 2010 consisted of the following:

	September 30,  2011		December 31, 2010
Knight’s Bridge Capital Partners Internet Fund No. 1 GP LLC	$	18	$	18
Polaroid		2,740		2,688
Total investments	$	2,758	$	2,706

Knight’s Bridge Capital Partners Internet Fund No. 1 GP LLC (“Knight’s Bridge GP”)

The Company accounts for its investment under the equity method.  For the year ended December 31, 2010, the Company recorded $17 as its share of Knight’s Bridge GP’s earnings, and received cash distributions of $17.  During the first nine months of 2011, the Company recorded $3 as its share of Knight’s Bridge GP’s earnings, and received $3 of cash distributions.  Based on the Company’s analysis of Knight’s Bridge GP’s financial statements and projections as at September 30, 2011, the Company concluded that there has been no other than temporary impairment in the fair value of its investment, and that its book value is the best estimate of its fair value.

Polaroid

In the second quarter of 2009, the Company invested $2,621 to indirectly acquire an approximate 5% interest in Polaroid Corporation, pursuant to a Chapter 11 reorganization in a U.S. bankruptcy court.  The investment was made as part of a joint venture investor group (the “JV Group”) that includes both related parties and non-related parties.  The JV Group formed two operating companies (collectively, “Polaroid”) to hold the acquired intellectual property (PLR IP Holdings, LLC) and inventory (PLR Acquisition, LLC).  The Company, the related parties and two of the unrelated parties formed KPL, LLC (“KPL” or the “LLC”) to pool their individual investments in Polaroid.  The pooled investments totaled approximately $19 million of the aggregate purchase price of approximately $55 million.  KPL is managed by a related party, Knight’s Bridge Capital Partners Management, L.P. (the “Management LP”), who acts as the General Partner of the LLC.  The Management LP is a wholly-owned subsidiary of the Company’s majority shareholder, Counsel.

The Company’s investment in the LLC has two components:

· CRBCI invested $530 to acquire Class D units.  These units are subject to a 2% annual management fee, payable to the General Partner.  The units have a 10% per annum preferred return; any profits generated in addition to the preferred return, subsequent to the return of invested capital, are subject to the Management LP’s 20% carried interest.  Following cash distributions of $46 in 2009 and $56 in 2010, and additional investments of $54 in 2010 and $11 in 2011, the Company’s cumulative cash investment totals $493.

· CRBCI invested $2,091 to acquire Counsel’s rights and obligations as an indirect limited partner (but not Counsel’s limited partnership interest) in Knight’s Bridge Capital Partners Fund I, L.P. (“Knight’s Bridge Fund”), a related party, with respect to the Polaroid investment.  The investment in these units is held by Knight’s Bridge Fund in the name of a Canadian limited partnership (the “LP”) comprised of Counsel (95.24%) and several parties related to Counsel.  The $2,091 was Counsel’s share of the LP’s investment and was funded by Counsel.  Subsequent to making the investment in the LP, Counsel sold, to CRBCI, the economic benefit of its indirect investment in Polaroid.  CRBCI is also responsible for reimbursing Counsel for its share of the management fees, which are 2% of the investment.  The economic interest entitles CRBCI to an 8% per annum preferred return.  Any profits generated in addition to the preferred return, subsequent to the return of invested capital, are subject to the general partner of the Knight’s Bridge Fund’s 20% carried interest.  Following additional investments of $11 in 2009, $263 in 2010, and $31 in the first nine months of 2011, and cash distributions of $186 and $233 in 2009 and 2010, respectively, the Company’s cumulative cash investment totals $1,977.

The Company accounts for its investments in the LLC under the equity method.  For the years ended December 31, 2009 and 2010, the Company recorded $246 and $14, respectively, as its share of earnings.  During the first nine months of 2011, the Company recorded $10 as its share of the LLC’s earnings (2010 - $55).

At December 31, 2010, the Company used a discounted cash flow methodology to estimate that its investment in Polaroid had a fair value of approximately $3,348.  The Company has concluded, based on Polaroid’s operating results for the first nine months of 2011, and projections for future quarters, that there has been no material change to the estimated fair value.

Summarized financial information – Equity accounted asset liquidation investments

The table below details the results of operations, for the nine months ended September 30, 2011 and 2010, attributable to CRBCI from the Joint Ventures in which it was invested during those periods.

	2011		2010
Gross revenues	$	3,474	$	15,729
Gross profit	$	2,098	$	4,441
Income from continuing operations	$	2,195	$	4,408
Net income	$	2,195	$	4,408
Net income after non-controlling interest	$	2,195	$	3,306