Variable Interest Entities (VIE)

3 Months Ended

Aug. 31, 2011

Variable Interest Entities (VIE)

Note 6.    Variable Interest Entities (VIE)

The consolidated financial statements of Greystone include Greystone Real Estate, L.L.C. (“GRE”) and GLOG Investments, L.L.C. (“GLOG”).  GRE owns two buildings located in Bettendorf, Iowa which are leased to Greystone Manufacturing, L.L.C. (“GSM”).  At August 31, 2011 and prior to the asset distribution discussed in Note 5 above, GLOG’s sole asset was Greystone’s Series 2003 Convertible Preferred Stock in the face amount of $5,000,000 and its only liability was a $3,669,084 note payable to F&M Bank & Trust Company (“F&M”).  GRE, GLOG, and GSM were parties to an amended loan agreement with F&M which contained cross-collateralization and cross-default provisions.  Effective with the August 31, 2011 loan amendment with F&M as discussed in Note 5 above, GLOG was replaced by the Borrowers under the loan agreement.