Description of Business and Principles of Consolidation

12 Months Ended

Dec. 31, 2011

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 – Description of Business and Principles of Consolidation

These consolidated financial statements include the accounts of Counsel RB Capital Inc. together with its subsidiaries, including Counsel RB Capital LLC (“Counsel RB”), Equity Partners CRB LLC, C2 Communications Technologies Inc., and C2 Investments Inc. These entities, collectively, are referred to as “CRBCI”, the “Company”, “we” or “our” in these financial statements. Our consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), as outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and include the assets, liabilities, revenues, and expenses of all subsidiaries over which CRBCI exercises control. All significant intercompany accounts and transactions have been eliminated upon consolidation.

The Company operates in two business segments, Asset Liquidation and Patent Licensing. The Company’s segments are discussed in more detail in Note 15.

Counsel RB is the Company’s Asset Liquidation operating segment, specializing in the acquisition and disposition of distressed and surplus assets throughout the United States and Canada. Counsel RB was established and began operations in 2009, and was originally owned 75% by the Company and 25% by its Co-CEOs. In November 2010, the Company acquired the Co-CEOs’ 25% interest in exchange for approximately 3.2 million shares of the Company. In June 2011, Counsel RB expanded its operations through its acquisition of 100% of the business of EP USA, LLC (d/b/a Equity Partners) (“Equity Partners”), a boutique investment banking firm and provider of financial solutions for distressed business and properties. Both Counsel RB’s operations and this transaction are discussed in more detail in Note 2 of these consolidated financial statements. In February 2012, the Company expanded its asset liquidation operations when CRBCI acquired 100% of the outstanding equity of Heritage Global Partners, Inc. (“HGP”), a full-service, global auction and asset advisory firm. This transaction is discussed in more detail in Note 16.

Licensing of intellectual property constitutes the Company’s Patent Licensing operating segment. CRBCI owns certain patents, including two foundational patents in voice over internet protocol (“VoIP”) technology – U.S. Patent Nos. 6,243,373 (the “VoIP Patent”) and 6,438,124 (the “C2 Patent”) (together the “VoIP Patent Portfolio”), which it licenses. The VoIP Patent, including a corresponding foreign patent and related international patent applications, was acquired from a third party in 2003. The C2 Patent was developed by the Company. CRBCI’s target market consists of carriers, equipment manufacturers, service providers and end users in the internet protocol telephony market who are using CRBCI’s patented VoIP technologies by deploying VoIP networks for phone-to-phone communications.

In 2007, the Company began investing in Internet-based e-commerce businesses by acquiring minority positions in several companies. It has since sold several of those interests, realizing gains in each case. The Company’s most significant investment took place in the second quarter of 2009, when it 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. CRBCI’s interest in Polaroid is managed by Knight’s Bridge Capital Management L.P., an affiliate of CRBCI’s parent, Counsel Corporation (together with its subsidiaries, “Counsel”). The Company’s investments are discussed in more detail in Note 5.