Investments

3 Months Ended

Mar. 31, 2012

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments Disclosure [Text Block]

Note 7 – Investments

The Company’s investments as of March 31, 2012 and December 31, 2011 consisted of the following:

	March 31, 2012		December 31, 2011
Knight’s Bridge Capital Partners Internet Fund No. 1 GP LLC	$	19	$	19
Polaroid		2,569		2,753
Total investments	$	2,588	$	2,772

The Company accounts for its investments under the equity method.

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

For the year ended December 31, 2011, the Company recorded $5 as its share of Knight’s Bridge GP’s earnings, and received cash distributions of $4. During the first quarter of 2012, the Company recorded $1 as its share of Knight’s Bridge GP’s earnings, and received $1 of cash distributions. Based on the Company’s analysis of Knight’s Bridge GP’s financial statements and projections as at March 31, 2012, 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 Polaroid assets. 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 totalled 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”), which acts as the General Partner of the LLC. The Management LP is a wholly-owned subsidiary of the Company’s majority shareholder, Counsel Corporation (together with its subsidiaries, “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, $56 in 2010, and $31 in the first quarter of 2012, and additional investments of $54 in 2010 and $11 in 2011, the Company’s cumulative cash investment totals $462.

· 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 in return for a loan (under a pre-existing loan facility that is discussed in more detail in Note 11) bearing interest at 10% per annum. 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 Management LP’s 20% carried interest. Following additional investments of $11 in 2009, $263 in 2010, $31 in 2011, and $20 in 2012, and cash distributions of $186 in 2009, $233 in 2010, and $125 in the first quarter of 2012, the Company’s cumulative cash investment totals $1,872.

For the years ended December 31, 2010 and 2011, the Company recorded $14 and $23, respectively, as its share of earnings. During the first three months of 2012, the Company recorded a loss of $48 as its share of the LLC’s operations (2011 - $14).

Summarized financial information – Equity accounted asset liquidation investments

The table below details the results of operations, for the three months ended March 31, 2012 and 2011, attributable to CRBCI from the Joint Ventures in which it was invested during those periods.

	2012		2011
Gross revenues	$	4,071	$	1,929
Gross profit	$	1,066	$	1,522
Income from continuing operations	$	1,069	$	1,560
Net income	$	1,069	$	1,560
Net income after non-controlling interest	$	1,069	$	1,560