COMMITMENTS AND CONTINGENCIES	9 Months Ended
Sep. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Contractual Agreements New World Realty Advisors, LLC As more fully discussed in our annual report on Form 10-K for the year ended December 31, 2013, New World Realty Advisors, LLC (“NWRA”), a former affiliate of NW Capital, was engaged to provide us with certain consulting and advisory services in connection with the development and implementation of an interim recovery and workout plan and long-term strategic growth plan. Effective May 3l, 2014, the Company terminated the consulting agreement with NWRA, although NWRA was entitled to 10% legacy asset performance fee for certain assets which were under contract for sale at the date of termination of the consulting agreement. For the nine months ended September 30, 2014 and 2013, NWRA earned a base consulting fee of approximately $0.8 million and $1.1 million, respectively. NWRA earned legacy asset fees totaling $0.3 million and zero during the three months ended September 30, 2014 and 2013, respectively, and $1.4 million and $0.2 million during the nine months ended September 30, 2014 and 2013, respectively. Legacy asset fees are included as an offset in gain on disposal of assets in the accompanying condensed consolidated statements of operations. NWRA earned an origination fee of $0.2 million during the nine months ended September 30, 2013 which was included in the basis of the asset acquired. ITH Partners, LLC As more fully discussed in our annual report on Form 10-K for the year ended December 31, 2013, ITH Partners, LLC (“ITH Partners”) was engaged to provide various consulting services, including: providing assistance in strategic and business development matters, performing diligence and analytical work with respect to our asset portfolio, and assisting in prospective asset purchases and sales. As described in the Current Report on Form 8-K filed on July 29, 2014, effective July 24, 2014, the Company terminated its contract with ITH Partners. During the three months ended September 30, 2014 and 2013, we incurred consulting fees to ITH Partners of $0.1 million and $0.2 million, respectively, which are included in professional fees in the accompanying condensed consolidated statements of operations. During the nine months ended September 30, 2014 and 2013, we incurred consulting fees of $0.5 million and $0.6 million for each respective period which are included in professional fees in the accompanying condensed consolidated statements of operations. ITH Partners was also entitled to a legacy asset performance fee equal to 3% of the positive difference derived by subtracting (i) 110% of our December 31, 2010 valuation of any asset then owned by us from the (ii) the gross sales proceeds, if any, from sales of that legacy asset (on a legacy asset by asset basis without any offset for losses realized on any individual asset sales). During the three months ended September 30, 2014 and 2013, ITH Partners earned legacy asset fees totaling $0.1 million and $14,000, respectively. During the nine months ended September 30, 2014 and 2013, ITH Partners earned legacy asset fees totaling $0.9 million and $62,000, respectively, a portion of which is included as an offset in gain on disposal of assets and a portion which is included as an offset in recovery of credit losses in the accompanying consolidated statement of operations. In addition, ITH Partners is entitled to certain special payments for assistance in securing debt or equity financing with the fee ranging from .0.75% to 1.0% of the amount raised. During the three and nine month periods ended September 30, 2014 and 2013, ITH Partners earned special payments of $0.3 million for each period. Also, as described in note 9, the Company also issued a warrant to ITH Partners to purchase 1.0 million shares of the Company’s common stock at its fair value as of the date of grant, or $1.72 per share. JCP Realty Advisors, LLC As described in the Current Report on Form 8-K filed on July 29, 2014, on July 24, 2014, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with JCP Realty Advisors, LLC (“JCP”), an affiliate of one of the Series B Investors, pursuant to which JCP will perform various services for the Company, including, but not limited to, advising the Company with respect to identifying, structuring, and analyzing investment opportunities, including assisting the Company manage and liquidate assets, including non-performing assets. The initial term of the Consulting Agreement is 3 years and is automatically renewable for an additional 2 years unless notice of termination is provided. Fees consist of an annual base consulting fee of $0.6 million (subject to possible upward adjustment based on annual review by our board of directors) during the term of the Consulting Agreement. In addition to the annual base consulting fee, JCP may be entitled to certain fees in connection with loans made by the Company or its affiliates to persons or opportunities arising through the efforts of JCP. JCP is also entitled to payments derived from the disposition of certain assets held by the Company as of December 31, 2010, at an amount equal to 5.5% of the positive difference derived by subtracting (i) 110% of our December 31, 2010 valuation mark of that asset then owned by us from the (ii) the gross sales proceeds, if any, from sales of that asset (on a legacy asset by asset basis without any offset for losses realized on any individual asset sales). During the period ended September 30, 2014, JCP earned base consulting fees of $0.1 million and no legacy fees. The foregoing summary is qualified in its entirety by reference to the above-referenced Current Report. Development Services Agreements During 2012, we entered into two development services agreements with Titan Investments, LLC ("Titan"), a third party developer, to manage the development of certain existing real estate we own. As described below, one of these agreements was terminated in January 2014. The other agreement, which was amended and extended in April 2014, relates to a planned multi-family residential housing and retail development located in the Minneapolis suburb of Apple Valley to be known as Parkside Village (the “Apple Valley Project”). The aggregate carrying value of our land assets pertaining to the Apple Valley Project totaled $5.8 million at September 30, 2014, and the estimated project development costs for Phase 1 of this project, consisting of a 196-unit multi-family residential housing development known as Gabella ("Gabella"), are expected to total $35.5 million. As described in note 11, subsequent to September 30, 2014, we secured construction financing in the amount of $24.0 million and entered into a joint venture with an affiliate of Titan to commence construction. We may seek to obtain other joint venture partners for this project to help meet minimum equity requirements under the construction loan agreement. The second project related to a planned 600-bed student housing complex located in Tempe, Arizona. During the nine months ended September 30, 2014, management elected to sell the Tempe, Arizona property at an amount in excess of our basis of $6.4 million, which resulted in the termination of our development services agreement with Titan for this project. Under terms of the original development services agreement relating to the Apple Valley Project, Titan was entitled to a predevelopment services fee not to exceed $0.2 million, as well as a development services fee equal to 3.0% of the total project cost, less an agreed-upon land basis of $3.0 million, as well as a post-development services fee. The amended development services agreement provides for an additional $160,000 of predevelopment fees to be paid. The post development services fee will consist of a profit participation upon sale of the Apple Valley Project ranging from 7% to 10% of the profit, depending on the amount and timing of the project’s completion and sale. Alternatively, not earlier than 15 months following the achievement of 90% occupancy for the project, Titan may elect to cause us to buy out its interest in the project. If the developer makes such an election, the post development services fee will be based on the fair market value of the project at the time of the election. The agreement is in effect until the fifth anniversary of the substantial completion of the project, as defined. If we elect not to proceed with the project prior to our acceptance of the development authorization notice, the agreement is cancelable by us with 30 day notice by us, subject to full payment of the predevelopment services fee, a $0.5 million breakage fee, and any budgeted and approved costs incurred. Titan was paid $40,000 and $120,000 during the three and nine months ended September 30, 2014, respectively under the terms of the development services agreement. In connection with the Apple Valley Project, during the year ended December 31, 2013, we entered into a development agreement, development assistance agreement, a business subsidy agreement and other related agreements with the City of Apple Valley and related entities, the majority of which were amended in 2014. Under these agreements, we are required to commence construction by November 2014 and are subject to completion of the projects by May 2016 and other requirements. We expect to receive up to $3.2 million in tax increment financing over an extended period as well as a business subsidy totaling $1.1 million, of which we have received $0.2 million as of September 30, 2014 (as described in note 7). In addition, during 2012, we entered into an agreement with a large Arizona homebuilder to purchase from us and develop certain residential lots in a lot take-down program over a period of five years beginning in 2013. The agreement specifies that the purchase price of each lot shall be comprised of a basic purchase price, a premium amount and a profit participation, as applicable. The fair value of the residential lots exceeds the aggregate carrying value of those assets ($6.0 million) as of September 30, 2014. The builder purchased three lots from us during the nine months ended September 30, 2014, and purchased an additional lot subsequent to September 30, 2014. If the builder does not take down the lots within the scheduled timeframe specified in the agreement, the exclusive option to purchase such lots terminates. Strategic Actions Taken Relating to REO Assets In connection with our foreclosure on loans and our related acquisition of the underlying real estate assets collateral, we often inherit property subject to numerous liens and encumbrances. These liens and encumbrances may include liens securing indebtedness senior to our lien, property tax liens, liens securing special assessment or community facilities revenue bonds, liens securing HOA or community recreation club or golf assessments and dues, as well as customary covenants, conditions, restrictions and utility and other easements. Oftentimes the real estate assets we acquired through foreclosure are in a distressed state and in those cases we actively work to stabilize the asset, resolve disputes among different lienholders and creditors and protect our interest in the asset. As part of this process and with the intention of protecting or enhancing our interest in our loan and REO assets, we may, for strategic reasons, take actions, or fail to take actions, that result in a default of obligations relating to the property, some of which obligations may have a security or collateral interest in the subject real estate property. In some cases, we may be directly liable for certain of these obligations. These actions (or inactions) are intended to protect or enhance our interest in the property and in many cases relate to obligations that were incurred prior to our acquisition of the property and often relate to disputes among the various stakeholders, including the Company, regarding the amount, timing or priority of the obligations and the appropriate resolution of the various stakeholders' claims, which in many cases will result in less than a full recovery for some or all stakeholders given the distressed state of many of our REO properties. In conjunction with this strategy, as discussed in note 7, we previously placed one of our single asset subsidiaries into bankruptcy to address debt related matters associated with the subsidiary’s assets which had a carrying value of $4.8 million. This bankruptcy claim was denied in 2013 and after various appeals, we elected to withdraw our appeals during the period ended September 30, 2014 to allow for completion of the trustee sale to proceed at which time the assets were relinquished to satisfy the related liabilities, which exceeded the asset balance. As a result of this action, when the lender took title to those assets at the trustee sale, the carrying value of those assets, net of the debt obligation, accrued interest and other liabilities was charged to operations as a gain on disposal of assets in the amount of $3.3 million during the period ended September 30, 2014. In addition, since these actions (or inactions) may constitute events of default under the NW Capital loan, we have obtained and will seek to obtain a waiver in the future from NW Capital, if necessary. The Company believes that it could, if it elected to do so, settle or cure its defaults and we do not believe the losses or costs relating to any such actions would have a material adverse effect on our financial position or results of operations. Guarantor Recovery In December 2012, we received a favorable judgment against certain guarantors in connection with their personal guarantees on certain legacy loans on which we have since foreclosed. The amount of the judgment was for a specified principal amount plus accrued default interest at 24% annually computed on such principal amounts from January 5, 2010, which totaled $23.3 million as of September 30, 2014, plus recovery of certain collection costs. In February 2013, the parties entered into a stipulation agreement which was converted to a court order. Under the terms of the stipulation, the guarantors consented and agreed to take a number of actions including, but not limited to, providing a listing of all related business enterprises in which the guarantors hold an ownership interest for the purpose of assigning such interests to us, making a cash payment to us of $0.2 million, and delivering to us a quit claim deed to certain residential property located in Hawaii, subject to certain liens. Due to the uncertainty of the nature and extent of the available assets of these guarantors to pay the judgment amount, we have not recorded recoveries for any amounts due under this judgment, except to the extent we have received assets without contingencies. In this regard, we recognized $0.2 million in recovery income in prior periods based on the cash payment received in March 2013 which is included in recovery of credit losses in the accompanying condensed consolidated statements of operations. In addition, we recorded as an asset the Hawaii residential property during the year ended December 31, 2013 in the amount of $3.8 million representing the estimated fair value of the property, subject to certain non-recourse liens substantially in excess of the fair value of the property. During the nine months ended September 30, 2014, we purchased two of the liens placed on the Hawaii property totaling $15 million from the counter party for a purchase price of $1.3 million. As a result of the purchase of the liens, and because the liens have only recourse to the property, we recorded these liens at their fair value which approximated the fair value of the Hawaii property. During the nine months ended September 30, 2014, we recorded recovery income of $0.4 million relating to the proceeds received from the sale of a mortgage assigned to us during the period. As described in note 7, the Company assumed an unsecured note payable obligation in the amount of $3.18 million bearing annual interest at 3%, interest only payable monthly, maturing June 5, 2023. This note remained as an outstanding obligation of the Company as of September 30, 2014. However, a majority of the note balance is payable to certain entities affiliated with a loan guarantor against whom the Company has obtained the $23.3 million judgment described above. The Company obtained approval from substantially all of the other major creditors of the guarantor under this judgment as well as the court-appointed receiver to offset its liability under this $3.18 million note against the outstanding judgment. The Company and the receiver sought court approval for this offset but since we did not receive such approval as of September 30, 2014, we did not record any recovery relative to this matter during the period ended September 30, 2014. However, such approval was granted by the court subsequent to September 30, 2014, at which time the obligation under this note was legally expunged and recorded as recovery income. We are continuing to investigate and evaluate the assets of the guarantors available to enforce the terms of the stipulation and to collect all amounts due under the judgment. However, such amounts are not determinable as of September 30, 2014 and have not been recognized as recovery income in the accompanying condensed consolidated statements of operations. Further recoveries under this and other judgments received in our favor will be recognized when realization of the recovery is deemed probable and when all contingencies relating to recovery have been resolved. Legal Matters We may be a party to litigation as the plaintiff or defendant in the ordinary course of business. While various asserted and unasserted claims may exist, resolution of these matters cannot be predicted with certainty. We establish reserves for legal claims when payments associated with the claims become probable and the payments can be reasonably estimated. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, it is generally very difficult to predict what the eventual outcome will be, and when the matter will be resolved. The actual costs of resolving legal claims may be higher or lower than any amounts reserved for the claims. During the nine months ended September 30, 2014, a subsidiary of the Company received a demand for payment in the amount of $2.3 million in connection with a prior office lease between the lessor and that subsidiary. Based upon the advice of its counsel in this matter, management believes that the likelihood of loss from this claim is remote. Accordingly, no adjustment relating to this claim has been recorded.

COMMITMENTS AND CONTINGENCIES

Contractual Agreements

New World Realty Advisors, LLC

As more fully discussed in our annual report on Form 10-K for the year ended December 31, 2013, New World Realty Advisors, LLC (“NWRA”), a former affiliate of NW Capital, was engaged to provide us with certain consulting and advisory services in connection with the development and implementation of an interim recovery and workout plan and long-term strategic growth plan. Effective May 3l, 2014, the Company terminated the consulting agreement with NWRA, although NWRA was entitled to 10% legacy asset performance fee for certain assets which were under contract for sale at the date of termination of the consulting agreement. For the nine months ended September 30, 2014 and 2013, NWRA earned a base consulting fee of approximately $0.8 million and $1.1 million, respectively. NWRA earned legacy asset fees totaling $0.3 million and zero during the three months ended September 30, 2014 and 2013, respectively, and $1.4 million and $0.2 million during the nine months ended September 30, 2014 and 2013, respectively. Legacy asset fees are included as an offset in gain on disposal of assets in the accompanying condensed consolidated statements of operations. NWRA earned an origination fee of $0.2 million during the nine months ended September 30, 2013 which was included in the basis of the asset acquired.

ITH Partners, LLC

As more fully discussed in our annual report on Form 10-K for the year ended December 31, 2013, ITH Partners, LLC (“ITH Partners”) was engaged to provide various consulting services, including: providing assistance in strategic and business development matters, performing diligence and analytical work with respect to our asset portfolio, and assisting in prospective asset purchases and sales. As described in the Current Report on Form 8-K filed on July 29, 2014, effective July 24, 2014, the Company terminated its contract with ITH Partners.

During the three months ended September 30, 2014 and 2013, we incurred consulting fees to ITH Partners of $0.1 million and $0.2 million, respectively, which are included in professional fees in the accompanying condensed consolidated statements of operations. During the nine months ended September 30, 2014 and 2013, we incurred consulting fees of $0.5 million and $0.6 million for each respective period which are included in professional fees in the accompanying condensed consolidated statements of operations. ITH Partners was also entitled to a legacy asset performance fee equal to 3% of the positive difference derived by subtracting (i) 110% of our December 31, 2010 valuation of any asset then owned by us from the (ii) the gross sales proceeds, if any, from sales of that legacy asset (on a legacy asset by asset basis without any offset for losses realized on any individual asset sales). During the three months ended September 30, 2014 and 2013, ITH Partners earned legacy asset fees totaling $0.1 million and $14,000, respectively. During the nine months ended September 30, 2014 and 2013, ITH Partners earned legacy asset fees totaling $0.9 million and $62,000, respectively, a portion of which is included as an offset in gain on disposal of assets and a portion which is included as an offset in recovery of credit losses in the accompanying consolidated statement of operations. In addition, ITH Partners is entitled to certain special payments for assistance in securing debt or equity financing with the fee ranging from .0.75% to 1.0% of the amount raised. During the three and nine month periods ended September 30, 2014 and 2013, ITH Partners earned special payments of $0.3 million for each period. Also, as described in note 9, the Company also issued a warrant to ITH Partners to purchase 1.0 million shares of the Company’s common stock at its fair value as of the date of grant, or $1.72 per share.

JCP Realty Advisors, LLC

As described in the Current Report on Form 8-K filed on July 29, 2014, on July 24, 2014, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with JCP Realty Advisors, LLC (“JCP”), an affiliate of one of the Series B Investors, pursuant to which JCP will perform various services for the Company, including, but not limited to, advising the Company with respect to identifying, structuring, and analyzing investment opportunities, including assisting the Company manage and liquidate assets, including non-performing assets. The initial term of the Consulting Agreement is 3 years and is automatically renewable for an additional 2 years unless notice of termination is provided.

Fees consist of an annual base consulting fee of $0.6 million (subject to possible upward adjustment based on annual review by our board of directors) during the term of the Consulting Agreement. In addition to the annual base consulting fee, JCP may be entitled to certain fees in connection with loans made by the Company or its affiliates to persons or opportunities arising through the efforts of JCP. JCP is also entitled to payments derived from the disposition of certain assets held by the Company as of December 31, 2010, at an amount equal to 5.5% of the positive difference derived by subtracting (i) 110% of our December 31, 2010 valuation mark of that asset then owned by us from the (ii) the gross sales proceeds, if any, from sales of that asset (on a legacy asset by asset basis without any offset for losses realized on any individual asset sales). During the period ended September 30, 2014, JCP earned base consulting fees of $0.1 million and no legacy fees.

The foregoing summary is qualified in its entirety by reference to the above-referenced Current Report.

Development Services Agreements

During 2012, we entered into two development services agreements with Titan Investments, LLC ("Titan"), a third party developer, to manage the development of certain existing real estate we own. As described below, one of these agreements was terminated in January 2014. The other agreement, which was amended and extended in April 2014, relates to a planned multi-family residential housing and retail development located in the Minneapolis suburb of Apple Valley to be known as Parkside Village (the “Apple Valley Project”). The aggregate carrying value of our land assets pertaining to the Apple Valley Project totaled $5.8 million at September 30, 2014, and the estimated project development costs for Phase 1 of this project, consisting of a 196-unit multi-family residential housing development known as Gabella ("Gabella"), are expected to total $35.5 million. As described in note 11, subsequent to September 30, 2014, we secured construction financing in the amount of $24.0 million and entered into a joint venture with an affiliate of Titan to commence construction. We may seek to obtain other joint venture partners for this project to help meet minimum equity requirements under the construction loan agreement.

The second project related to a planned 600-bed student housing complex located in Tempe, Arizona. During the nine months ended September 30, 2014, management elected to sell the Tempe, Arizona property at an amount in excess of our basis of $6.4 million, which resulted in the termination of our development services agreement with Titan for this project.

Under terms of the original development services agreement relating to the Apple Valley Project, Titan was entitled to a predevelopment services fee not to exceed $0.2 million, as well as a development services fee equal to 3.0% of the total project cost, less an agreed-upon land basis of $3.0 million, as well as a post-development services fee. The amended development services agreement provides for an additional $160,000 of predevelopment fees to be paid. The post development services fee will consist of a profit participation upon sale of the Apple Valley Project ranging from 7% to 10% of the profit, depending on the amount and timing of the project’s completion and sale. Alternatively, not earlier than 15 months following the achievement of 90% occupancy for the project, Titan may elect to cause us to buy out its interest in the project. If the developer makes such an election, the post development services fee will be based on the fair market value of the project at the time of the election. The agreement is in effect until the fifth anniversary of the substantial completion of the project, as defined. If we elect not to proceed with the project prior to our acceptance of the development authorization notice, the agreement is cancelable by us with 30 day notice by us, subject to full payment of the predevelopment services fee, a $0.5 million breakage fee, and any budgeted and approved costs incurred. Titan was paid $40,000 and $120,000 during the three and nine months ended September 30, 2014, respectively under the terms of the development services agreement.

In connection with the Apple Valley Project, during the year ended December 31, 2013, we entered into a development agreement, development assistance agreement, a business subsidy agreement and other related agreements with the City of Apple Valley and related entities, the majority of which were amended in 2014. Under these agreements, we are required to commence construction by November 2014 and are subject to completion of the projects by May 2016 and other requirements. We expect to receive up to $3.2 million in tax increment financing over an extended period as well as a business subsidy totaling $1.1 million, of which we have received $0.2 million as of September 30, 2014 (as described in note 7).

In addition, during 2012, we entered into an agreement with a large Arizona homebuilder to purchase from us and develop certain residential lots in a lot take-down program over a period of five years beginning in 2013. The agreement specifies that the purchase price of each lot shall be comprised of a basic purchase price, a premium amount and a profit participation, as applicable. The fair value of the residential lots exceeds the aggregate carrying value of those assets ($6.0 million) as of September 30, 2014. The builder purchased three lots from us during the nine months ended September 30, 2014, and purchased an additional lot subsequent to September 30, 2014. If the builder does not take down the lots within the scheduled timeframe specified in the agreement, the exclusive option to purchase such lots terminates.

Strategic Actions Taken Relating to REO Assets

In connection with our foreclosure on loans and our related acquisition of the underlying real estate assets collateral, we often inherit property subject to numerous liens and encumbrances. These liens and encumbrances may include liens securing indebtedness senior to our lien, property tax liens, liens securing special assessment or community facilities revenue bonds, liens securing HOA or community recreation club or golf assessments and dues, as well as customary covenants, conditions, restrictions and utility and other easements. Oftentimes the real estate assets we acquired through foreclosure are in a distressed state and in those cases we actively work to stabilize the asset, resolve disputes among different lienholders and creditors and protect our interest in the asset.

As part of this process and with the intention of protecting or enhancing our interest in our loan and REO assets, we may, for strategic reasons, take actions, or fail to take actions, that result in a default of obligations relating to the property, some of which obligations may have a security or collateral interest in the subject real estate property. In some cases, we may be directly liable for certain of these obligations. These actions (or inactions) are intended to protect or enhance our interest in the property and in many cases relate to obligations that were incurred prior to our acquisition of the property and often relate to disputes among the various stakeholders, including the Company, regarding the amount, timing or priority of the obligations and the appropriate resolution of the various stakeholders' claims, which in many cases will result in less than a full recovery for some or all stakeholders given the distressed state of many of our REO properties. In conjunction with this strategy, as discussed in note 7, we previously placed one of our single asset subsidiaries into bankruptcy to address debt related matters associated with the subsidiary’s assets which had a carrying value of $4.8 million. This bankruptcy claim was denied in 2013 and after various appeals, we elected to withdraw our appeals during the period ended September 30, 2014 to allow for completion of the trustee sale to proceed at which time the assets were relinquished to satisfy the related liabilities, which exceeded the asset balance. As a result of this action, when the lender took title to those assets at the trustee sale, the carrying value of those assets, net of the debt obligation, accrued interest and other liabilities was charged to operations as a gain on disposal of assets in the amount of $3.3 million during the period ended September 30, 2014. In addition, since these actions (or inactions) may constitute events of default under the NW Capital loan, we have obtained and will seek to obtain a waiver in the future from NW Capital, if necessary. The Company believes that it could, if it elected to do so, settle or cure its defaults and we do not believe the losses or costs relating to any such actions would have a material adverse effect on our financial position or results of operations.

Guarantor Recovery

In December 2012, we received a favorable judgment against certain guarantors in connection with their personal guarantees on certain legacy loans on which we have since foreclosed. The amount of the judgment was for a specified principal amount plus accrued default interest at 24% annually computed on such principal amounts from January 5, 2010, which totaled $23.3 million as of September 30, 2014, plus recovery of certain collection costs. In February 2013, the parties entered into a stipulation agreement which was converted to a court order. Under the terms of the stipulation, the guarantors consented and agreed to take a number of actions including, but not limited to, providing a listing of all related business enterprises in which the guarantors hold an ownership interest for the purpose of assigning such interests to us, making a cash payment to us of $0.2 million, and delivering to us a quit claim deed to certain residential property located in Hawaii, subject to certain liens.

Due to the uncertainty of the nature and extent of the available assets of these guarantors to pay the judgment amount, we have not recorded recoveries for any amounts due under this judgment, except to the extent we have received assets without contingencies. In this regard, we recognized $0.2 million in recovery income in prior periods based on the cash payment received in March 2013 which is included in recovery of credit losses in the accompanying condensed consolidated statements of operations. In addition, we recorded as an asset the Hawaii residential property during the year ended December 31, 2013 in the amount of $3.8 million representing the estimated fair value of the property, subject to certain non-recourse liens substantially in excess of the fair value of the property. During the nine months ended September 30, 2014, we purchased two of the liens placed on the Hawaii property totaling $15 million from the counter party for a purchase price of $1.3 million. As a result of the purchase of the liens, and because the liens have only recourse to the property, we recorded these liens at their fair value which approximated the fair value of the Hawaii property. During the nine months ended September 30, 2014, we recorded recovery income of $0.4 million relating to the proceeds received from the sale of a mortgage assigned to us during the period.

As described in note 7, the Company assumed an unsecured note payable obligation in the amount of $3.18 million bearing annual interest at 3%, interest only payable monthly, maturing June 5, 2023. This note remained as an outstanding obligation of the Company as of September 30, 2014. However, a majority of the note balance is payable to certain entities affiliated with a loan guarantor against whom the Company has obtained the $23.3 million judgment described above. The Company obtained approval from substantially all of the other major creditors of the guarantor under this judgment as well as the court-appointed receiver to offset its liability under this $3.18 million note against the outstanding judgment. The Company and the receiver sought court approval for this offset but since we did not receive such approval as of September 30, 2014, we did not record any recovery relative to this matter during the period ended September 30, 2014. However, such approval was granted by the court subsequent to September 30, 2014, at which time the obligation under this note was legally expunged and recorded as recovery income.

We are continuing to investigate and evaluate the assets of the guarantors available to enforce the terms of the stipulation and to collect all amounts due under the judgment. However, such amounts are not determinable as of September 30, 2014 and have not been recognized as recovery income in the accompanying condensed consolidated statements of operations. Further recoveries under this and other judgments received in our favor will be recognized when realization of the recovery is deemed probable and when all contingencies relating to recovery have been resolved.

Legal Matters

We may be a party to litigation as the plaintiff or defendant in the ordinary course of business. While various asserted and unasserted claims may exist, resolution of these matters cannot be predicted with certainty. We establish reserves for legal claims when payments associated with the claims become probable and the payments can be reasonably estimated. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, it is generally very difficult to predict what the eventual outcome will be, and when the matter will be resolved. The actual costs of resolving legal claims may be higher or lower than any amounts reserved for the claims.

During the nine months ended September 30, 2014, a subsidiary of the Company received a demand for payment in the amount of $2.3 million in connection with a prior office lease between the lessor and that subsidiary. Based upon the advice of its counsel in this matter, management believes that the likelihood of loss from this claim is remote. Accordingly, no adjustment relating to this claim has been recorded.