Notes Payable To Related Parties

12 Months Ended

Dec. 31, 2013

15. Notes Payable

Effective December 31, 2012, CAM acquired a third party’s 32.2% participant interest in a non-performing commercial real estate loan held by CAM for $9.0 million payable pursuant to a promissory note. The note had an effective date of December 31, 2012 and matures on February 1, 2020. The note bears interest at the “Wall Street Journal Prime Rate” plus 100 basis points per annum and is payable monthly. The note is payable interest only for the first year and commencing on January 1, 2014 and continuing each succeeding month, CAM is required to make $27,000 of monthly principal payments. CAM completed the foreclosure on the underlying property of the non-performing commercial loan in November 2013 and the $9.0 million note is currently secured by a mortgage on the property. The $30.7 million property is included in real estate held-for-investment in the Company’s Consolidated Statement of Financial Condition as of December 31, 2013. The note may be prepaid in whole or in part without a prepayment fee. BBX Capital provided the participant a $4.5 million unconditional limited guaranty to further support the repayment of the note. The note was recorded at a $0.5 million discount as the fair value of the participant’s interest in the collateral had a fair value less cost to sell of $8.5 million as of December 31, 2012. The promissory note outstanding balance, net of the discount, was $8.6 million and $8.5 million as of December 31, 2013 and 2012, respectively.

CAM also acquired a third party’s 50% participant interest in a foreclosed real estate property for $2.5 million payable pursuant to a note. The note had an effective date of December 31, 2012, matures on December 31, 2017, and bears interest at a fixed rate of 8.00% per annum. The note is interest-only payable monthly until maturity. The $2.5 million note may be prepaid in whole or in part without a prepayment fee. The note was recorded at a $0.7 million discount as the fair value of the participant’s interest in the property had a fair value less cost to sell of $1.8 million. The $2.5 million note was paid-in-full in December 2013. The remaining discount of $0.6 million was recognized in interest expense in the Company’s Statement of Operations for the year ended December 31, 2013.

The annual maturities of note payable as of December 31, 2013 was as follows (in thousands):



Year Ending		Note
December 31,		Payable
2014		324
2015		324
2016		324
2017		324
2018		324
Thereafter		7,380
Total	$	9,000

Related Party [Member]

Notes Payable

14. Notes Payable to Related Parties

The Renin Transaction was partially funded by notes payable from Bluegreen. The Bluegreen loan includes a $3.0 million term loan and provides for additional borrowings of up to $9.0 million on a revolving basis, subject to terms of a borrowing basis specified in the loan. Amounts outstanding under the loan bear interest at a fixed rate of 7.25% per annum and are collateralized by substantially all of the assets of Renin. All amounts outstanding under the loan will, unless extended, become due on April 30, 2014. The outstanding balance of the Bluegreen note as of December 31, 2013 was $9.7 million.

As part of the closing of the Hoffman’s acquisition, one of the entities acquired borrowed $250,000 from the sellers in the transaction to fund working capital. The sellers remained employees of Hoffman’s subsequent to the acquisition and are considered related parties. The loan bore interest at 7% per annum and was repaid on February 28, 2014 in accordance with its terms.

The Company issued a $11.75 million promissory note in Woodbridge’s favor as part of the Company’s consideration for its investment in Woodbridge. The note has a term of five years, accrues interest at a rate of 5% per annum and requires the Company to make payments of interest only on a quarterly basis during the term of the note, with all outstanding amounts being due and payable at the end of the five-year term. The outstanding balance of the Woodbridge notes payable as of December 31, 2013 was $11.75 million.

The annual maturities of notes payable to related parties as of December 31, 2013 were as follows (in thousands):



Year Ending		Note
December 31,		Payable
2014	$	9,912
2015		-
2016		-
2017		-
2018		11,750
Thereafter		-
Total	$	21,662

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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