Related Party Transactions

12 Months Ended

Sep. 30, 2011

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE N — RELATED PARTY TRANSACTIONS

On April 29, 2008, the Company obtained a subordinated loan pursuant to a subordinated promissory note from the Family Entity. The loan is in the aggregate principal amount of approximately $8.2 million, bears interest at a rate of 6.25% per annum, is payable interest only each quarter until its maturity date of January 9, 2010, subject to prior repayment in full of the Company’s senior loan facility with the Bank Group. In December 2009 the promissory note’s maturity date was extended to December 31, 2010, and the interest rate was changed to 10% per annum.

On January 27, 2010, the Company re-paid approximately $860,740 of the subordinated loan. The Company delivered $787,500 to the Family Entity, and will deliver $73,240 to BMO to hold as collateral, as approximately 8.5% of the loan to the Family Entity secures the obligations due to BMO by Palisades Acquisition XVI, LLC, and the Company’s wholly owned subsidiary. The Family Entity then delivered its portion of the loan payment to Gary Stern, who used it to exercise the stock options awarded to him in the year 2000 (300,000 stock options under the 1995 Stock Option Plan of Asta Funding, Inc. with an exercise price of $2.625 per share). On February 17, 2010, the Company re-paid $1,500,000 of principal of the subordinated loan. The Company delivered $1,372,365 to the Family Entity, and delivered $127,635 to BMO to hold as collateral.

The Company paid GMS Family Investors, a related party, a 2% collateral fee of $160,000, related to the assets pledged by GMS Family Investors for the $6.0 million Bank Leumi Credit Agreement.

On March 26, 2010, the Company re-paid $1,500,000 of principal of the subordinated loan. The Company delivered $1,372,365 to the Family Entity, and the remaining $127,635 to BMO to hold as collateral.

On November 16, 2010, the Company repaid $1,970,000 of principal on the Subordinated Loan with the Family entity. The remaining balance due to the Family Entity under the Subordinated Loan after this payment is approximately $2,416,000. That balance was repaid on December 20, 2010.

On December 12, 2011, the Company and A. L. Piccolo & Co., Inc. (“Piccolo”), which is owned by Louis Piccolo, a director of the Company, entered into a Consulting Agreement, pursuant to which Piccolo will provide consulting services which include, but are not limited to, analysis of proposed debt and equity transactions, due diligence and financial analysis and management consulting services (“Services”). The Consulting Agreement shall be for a period of two years and Piccolo will receive compensation of $150,000 per annum payable monthly, a bonus of $25,000 per new transaction closed by the Company with Piccolo’s assistance (excluding any potential pending transactions), and 30,000 options per year,  with such options vesting in three equal annual installments on the first, second and third anniversaries of the grant date.