Note 13 - Real Estate Notes Payable and Bank Debt

12 Months Ended

Nov. 26, 2011

13. Real Estate Notes Payable and Bank Debt

The real estate notes payable and bank debt are summarized as follows:

	November 26, 2011			November 27, 2010
Real estate notes payable	$	3,864		$	13,816
Bank debt		-			-
		3,864			13,816
Less:
Current portion of real estate notes payable		(202	)		(9,521	)
	$	3,662		$	4,295

Real Estate Notes Payable

Certain of our retail real estate properties have been financed through commercial mortgages with an interest rate of 6.73%. These mortgages are collateralized by the respective properties with net book values totaling approximately $6,558 and $21,721 at November 26, 2011 and November 27, 2010, respectively. The current portion of these mortgages, $202 and $9,521 as of November, 2011 and November 27, 2010, respectively, has been included as a current liability in the accompanying consolidated balance sheets. The long-term portion, $3,662 and $4,295 as of November 26, 2011 and November 27, 2010, respectively, is presented as real estate notes payable in the consolidated balance sheets. During fiscal 2011, we entered into Discounted Payoff Agreements (“DPOs”) with the lenders on three mortgages which were subsequently paid off during the year. Under the terms of these DPOs the remaining balance owed was reduced, resulting in a $1,305 gain on the settlement of these mortgages. This gain is included in other income (loss), net, in our consolidated statements of operations.

The fair value of these mortgages was $3,804 and $13,556 at November 26, 2011 and November 27, 2010, respectively. In determining the fair value we utilized current market interest rates for similar instruments. The inputs into these fair value calculations reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures. See Note 8.

Maturities of real estate notes payable are as follows:

Fiscal 2012	$	202
Fiscal 2013		216
Fiscal 2014		231
Fiscal 2015		247
Fiscal 2016		264
Thereafter		2,704
	$	3,864

Bank Debt

With our current level of liquidity, we have substantially reduced the size of our line of credit with our bank. On July 5, 2011, we entered into a temporary renewal agreement with our bank for a $10,000 revolving line of credit that matured September 5, 2011. On September 28, 2011, we received a commitment letter from our bank offering a $3,000 line of credit which will be used primarily to back our outstanding letters of credit. This new credit facility, which became effective on December 9, 2011, contains covenants requiring us to maintain certain key financial ratios, however there will be no requirement to pledge assets as collateral.

At November 26, 2011, we had $2,318 outstanding under standby letters of credit.

Total interest paid, including bank and mortgage debt, during fiscal 2011, 2010 and 2009 was $895, $1,830 and $2,396, respectively.

- 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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