BUSINESS, BASIS OF PRESENTATION AND LIQUIDITY	12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS, BASIS OF PRESENTATION AND LIQUIDITY	BUSINESS, BASIS OF PRESENTATION AND LIQUIDITY Our Company IMH Financial Corporation (together with its subsidiaries, the “Company”) is a real estate investment and finance company based in the southwestern United States engaged in various and diverse facets of the real estate lending and investment process, including origination, acquisition, underwriting, servicing, enforcement, development, marketing, and disposition. The Company’s focus is to invest in, manage and dispose of commercial real estate mortgage investments, hospitality assets, and other real estate assets, and to perform all functions reasonably related thereto, including developing, managing and either holding for investment or disposing of real property acquired through acquisition, foreclosure or other means. Over the past several years, we acquired certain operating properties through deed-in-lieu of foreclosure or purchase which have contributed significantly to our operating revenues and expenses in recent years. While our lending and investment activities decreased modestly from 2018 to 2019, our operating properties continued to drive the majority of Company revenues in fiscal 2019 and 2018. Our History and Structure We were formed from the conversion of our predecessor entity, IMH Secured Loan Fund, LLC (the “Fund”), into a Delaware corporation. The Fund, which was organized in May 2003, commenced operations in August 2003, focusing on investments in senior short-term whole commercial real estate mortgage loans collateralized by first mortgages on real property. The Fund was externally managed by Investors Mortgage Holdings, Inc. (the “Manager”), which was incorporated in Arizona in June 1997 and is licensed as a mortgage banker by the State of Arizona. Through a series of private placements to accredited investors, the Fund raised $875 million of equity capital from May 2003 through December 2008. Due to the cumulative number of investors in the Fund, the Fund registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on April 30, 2007 and began filing periodic reports with the Securities and Exchange Commission, (“SEC”). On June 18, 2010, following approval by members representing 89% of membership units of the Fund voting on the matter, the Fund became internally-managed through the acquisition of the Manager, and converted into a Delaware corporation in a series of transactions that we refer to as the Conversion Transactions. As more fully described in Note 17, during the year ended December 31, 2019, the Company engaged an external investment manager in connection with the Company’s effort to reduce Company overhead. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of IMH Financial Corporation and the following wholly-owned operating subsidiaries: 11333, Inc. (formerly known as Investors Mortgage Holdings, Inc.), an Arizona corporation, Investors Mortgage Holdings California, Inc., a California corporation, IMH Holdings, LLC, a Delaware limited liability company (“Holdings”), and various other wholly owned subsidiaries established in connection with the acquisition of real estate either through foreclosure or purchase and/or for borrowing purposes, as well as its majority owned or controlled real estate entities and its interests in variable interest entities (“VIEs”) in which the Company is determined to be the primary beneficiary. Holdings is a holding company for IMH Management Services, LLC, an Arizona limited liability company, which provides us and our affiliates with human resources and administrative services, including the supply of employees. Other entities in which we have invested and have the ability to exercise significant influence over operating and financial policies of the investee, but upon which we do not possess control, are accounted for by the equity method of accounting within the financial statements and they are therefore not consolidated. The Company, through certain subsidiaries, obtained certain real estate assets and equity interests in a number of limited liability companies and limited partnerships with various real estate holdings and related assets as a result of certain loan and guarantor enforcement and collection efforts. These entities have been consolidated in the accompanying consolidated financial statements based on the extent of the Company’s controlling financial interest in each such entity. During 2019, we participated in a joint venture sponsored and managed by an affiliate of one of our preferred shareholders, the purpose of which was to provide mezzanine financing on a hotel development in Albuquerque, New Mexico. Since we neither control, manage nor own a majority of joint venture interest, we have accounted for this as an investment in unconsolidated entities. See Note 6 for a further discussion of the effects of the consolidation, our equity investments and VIEs. All significant intercompany accounts and transactions have been eliminated in consolidation. Liquidity and Going Concern We require liquidity and capital resources for our general working capital needs, including maintenance, development costs and capital expenditures for our operating properties and non-operating real estate owned (“REO”) assets, professional fees, general and administrative operating costs, loan enforcement costs, financing costs, debt service payments, and dividends to our preferred shareholders, as well as to acquire our target assets. As of December 31, 2019, our accumulated deficit aggregated $718.8 million primarily as a result of previous provisions for credit losses recorded between 2008 and 2010 (due primarily to the erosion of the U.S. and global real estate and credit markets during those periods) relating to the decrease in the fair value of the collateral securing our legacy loan portfolio and impairment charges relating to the value of real estate owned (“REO”) assets acquired primarily through foreclosure, as well as on-going net operating losses resulting from the lack of income-producing assets. The Company has met its near-term liquidity requirements by, among other things, obtaining outside financing, selling mortgage loans, and selling the majority of our legacy real estate assets. During the fourth quarter of 2019, in order to meet impending liquidity requirements, we sold one of our mezzanine loan investments with a principal balance of $12.3 million at a discount incurring a loss of $2.6 million, reflected in provision for (recovery of) credit losses, net in the consolidated statements of operations. During the year ended December 31, 2019, we generated net cash of approximately $0.8 million (after payment of closing expenses and related indebtedness) from the sale of certain REO assets. In addition, subsequent to December 31, 2019, we sold a commercial office building (the “Broadway Tower”) in a cash sale for $19.5 million which, after selling expenses and payoff of underlying secured indebtedness of $11.0 million, netted $8.0 million in cash to the Company (Note 18). In September 2019, the Company entered into a Series B-4 Cumulative Convertible Preferred Stock Subscription Agreement with JPMorgan Chase Funding Inc. (“JPM Funding”), pursuant to which JPM Funding purchased 1,875,000 shares of our Series B-4 Cumulative Convertible Preferred Stock, $0.01 par value per share, (the “Series B-4 Preferred Stock”), at a purchase price of $3.20 per share, for a total purchase price of $6.0 million. The Company is using the proceeds from the sale of these shares for general corporate purposes. Dividends on the Series B-4 Preferred Stock accrue at the rate of 5.65% per year. In connection with the acquisition of MacArthur Place in October 2017, the Company entered into a building loan agreement and related agreements with MidFirst Bank in the amount of $32.3 million (the “MacArthur Loan”). The MacArthur Loan was modified during the first quarter of 2019 to increase the loan facility to $37.0 million and establish certain additional reserve accounts in the amount of $2.0 million for the completion of certain capital projects. The MacArthur Loan has an initial maturity date of October 1, 2020, with two one-year extension options available, contingent upon construction completion and repayment guarantees provided by the Company. The modified MacArthur Loan required the Company to fund minimum equity of $27.7 million, all of which has been funded as of December 31, 2019. The Company has provided a loan repayment guaranty equal to 50% of the original loan’s principal amount, as well as a guaranty of interest and operating deficits and other customary non-recourse carve-out matters such as bankruptcy and environmental matters. Under the guarantees, the Company is required to maintain a minimum Tangible Net Worth, as defined, of $50.0 million and minimum liquidity of $5.0 million throughout the loan term. The Company was in full compliance with such financial covenants as of December 31, 2019. In addition, the MacArthur Loan requires MacArthur Place to establish various operating and reserve accounts at MidFirst Bank which are subject to a cash management agreement. In the event of default, MidFirst Bank has the ability to take control of such accounts for the allocation and distribution of proceeds in accordance with the cash management agreement. Commencing in November 2017, the Company sponsored an offering under SEC Regulation D of up to $25.0 million of preferred limited liability company interests (the “Preferred Interests”) of the L’Auberge de Sonoma Resort Fund, LLC (the “Hotel Fund”), which was fully subscribed by the second quarter of 2019. The net proceeds of this offering were primarily used to (i) reimburse the Company for its initial $17.8 million common investment in the Hotel Fund and (ii) fund certain renovations and operating losses at the hotel. As of December 31, 2019, we had cash and cash equivalents of $7.9 million, REO assets held for sale with a carrying value of $25.5 million and other REO assets with a carrying value of $33.3 million that we seek to dispose of within the next 12 months. As mentioned above, we sold our Broadway Tower commercial office building subsequent to December 31, 2019. We continue to evaluate potential disposition strategies for our remaining REO assets and to seek additional sources of debt and equity for investment and working capital purposes. As described in Note 15, at any time after July 24, 2020, each holder of our Series B-1 and B-2 Preferred Stock may require the Company to redeem, out of legally available funds, the shares held by such holder at a price (the “Redemption Price”) equal to the greater of (i) 150% of the sum of the original price per share plus all accrued and unpaid dividends or (ii) the sum of the tangible book value of the Company per share of voting Common Stock plus all accrued and unpaid dividends as of the date of redemption. As of December 31, 2019, the aggregate Redemption Price for the Series B-1 and Series B-2 Preferred Stock would be approximately $39.6 million. In addition, pursuant to an agreement to extend the Redemption Date, a cash payment in the aggregate amount of $2.6 million is due and payable to the holders of the Series B-1 and B-2 Preferred Stock on July 24, 2020 whether or not a redemption is requested. As further described in Note 15, the holders of the Series B-3 and B-4 Preferred Stock may require the Company to redeem, out of legally available funds, those share for $11.6 million and $8.7 million, respectively. The current holders of our Series B Preferred Stock are collectively referred to herein as the “Series B Investors”. We are presently in discussions with the Series B Investors regarding a restructuring of some or all of the terms of these securities. There is no assurance, however, that all or any of the Series B Investors will agree to restructure these securities, or if so, whether the terms will be beneficial to the Company. We expect our primary sources of liquidity over the next twelve months to consist of our proceeds from the disposition of our existing REO assets, proceeds from borrowings and equity issuances, current cash, revenues from ownership or management of hotels, and investment income. Historically, we have used proceeds from the issuance of preferred equity and/or debt, proceeds from the sale of our REO assets, and the liquidation of mortgages and related investments to satisfy our working capital requirements. During the fourth quarter of 2019, in order to meet impending liquidity requirements, we sold one of our mezzanine loan investments with a principal balance of $12.3 million at a discount incurring a loss of $2.6 million. As described above, we sold our Broadway Tower commercial office building in January 2020, netting $8.0 million in cash to the Company after payment of related debt. We also are in discussions with the holders of our Series B Preferred Stock regarding a restructuring or modification of those securities and our obligations. There can be no assurance that these efforts will be successful or that we will sell our remaining REO assets in a timely manner or in obtaining additional or replacement financing, if needed, to sufficiently fund our future operations, redeem our Series B-1 and B-2 Preferred Stock if so required, repay existing debt, or to implement our investment strategy. In the event we are unsuccessful in negotiating a deferral or restructuring of the terms of our Series B-1 and B-2 Preferred Stock, we will be required to fund the redemption of $39.6 million. In the absence of proceeds from asset sales, equity issuances or borrowings to fund the Redemption Price, the required redemption would likely render the Company insolvent. Moreover, our failure to generate sustainable earning assets and to successfully liquidate a significant portion of our REO assets will have a material adverse effect on our business, results of operations and financial position. As more fully described in Note 18 to the consolidated financial statements, the Company may be materially impacted by the outbreak of a novel coronavirus (COVID-19), which was declared a global pandemic by the World Health Organization in March 2020. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. In the absence of favorably resolving the matters described above, the collective nature of these uncertainties create substantial doubt about our ability to continue as a going concern for a period beyond one year from the date of issuance of these consolidated financial statements. The accompanying consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. They do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.

BUSINESS, BASIS OF PRESENTATION AND LIQUIDITY

Our Company

IMH Financial Corporation (together with its subsidiaries, the “Company”) is a real estate investment and finance company based in the southwestern United States engaged in various and diverse facets of the real estate lending and investment process, including origination, acquisition, underwriting, servicing, enforcement, development, marketing, and disposition. The Company’s focus is to invest in, manage and dispose of commercial real estate mortgage investments, hospitality assets, and other real estate assets, and to perform all functions reasonably related thereto, including developing, managing and either holding for investment or disposing of real property acquired through acquisition, foreclosure or other means.

Over the past several years, we acquired certain operating properties through deed-in-lieu of foreclosure or purchase which have contributed significantly to our operating revenues and expenses in recent years. While our lending and investment activities decreased modestly from 2018 to 2019, our operating properties continued to drive the majority of Company revenues in fiscal 2019 and 2018.

Our History and Structure

We were formed from the conversion of our predecessor entity, IMH Secured Loan Fund, LLC (the “Fund”), into a Delaware corporation. The Fund, which was organized in May 2003, commenced operations in August 2003, focusing on investments in senior short-term whole commercial real estate mortgage loans collateralized by first mortgages on real property. The Fund was externally managed by Investors Mortgage Holdings, Inc. (the “Manager”), which was incorporated in Arizona in June 1997 and is licensed as a mortgage banker by the State of Arizona. Through a series of private placements to accredited investors, the Fund raised $875 million of equity capital from May 2003 through December 2008. Due to the cumulative number of investors in the Fund, the Fund registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on April 30, 2007 and began filing periodic reports with the Securities and Exchange Commission, (“SEC”). On June 18, 2010, following approval by members representing 89% of membership units of the Fund voting on the matter, the Fund became internally-managed through the acquisition of the Manager, and converted into a Delaware corporation in a series of transactions that we refer to as the Conversion Transactions. As more fully described in Note 17, during the year ended December 31, 2019, the Company engaged an external investment manager in connection with the Company’s effort to reduce Company overhead.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of IMH Financial Corporation and the following wholly-owned operating subsidiaries: 11333, Inc. (formerly known as Investors Mortgage Holdings, Inc.), an Arizona corporation, Investors Mortgage Holdings California, Inc., a California corporation, IMH Holdings, LLC, a Delaware limited liability company (“Holdings”), and various other wholly owned subsidiaries established in connection with the acquisition of real estate either through foreclosure or purchase and/or for borrowing purposes, as well as its majority owned or controlled real estate entities and its interests in variable interest entities (“VIEs”) in which the Company is determined to be the primary beneficiary. Holdings is a holding company for IMH Management Services, LLC, an Arizona limited liability company, which provides us and our affiliates with human resources and administrative services, including the supply of employees. Other entities in which we have invested and have the ability to exercise significant influence over operating and financial policies of the investee, but upon which we do not possess control, are accounted for by the equity method of accounting within the financial statements and they are therefore not consolidated.

The Company, through certain subsidiaries, obtained certain real estate assets and equity interests in a number of limited liability companies and limited partnerships with various real estate holdings and related assets as a result of certain loan and guarantor enforcement and collection efforts. These entities have been consolidated in the accompanying consolidated financial statements based on the extent of the Company’s controlling financial interest in each such entity. During 2019, we participated in a joint venture sponsored and managed by an affiliate of one of our preferred shareholders, the purpose of which was to provide mezzanine financing on a hotel development in Albuquerque, New Mexico. Since we neither control, manage nor own a majority of joint venture interest, we have accounted for this as an investment in unconsolidated entities. See Note 6 for a further discussion of the effects of the consolidation, our equity investments and VIEs.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Liquidity and Going Concern

We require liquidity and capital resources for our general working capital needs, including maintenance, development costs and capital expenditures for our operating properties and non-operating real estate owned (“REO”) assets, professional fees, general and administrative operating costs, loan enforcement costs, financing costs, debt service payments, and dividends to our preferred shareholders, as well as to acquire our target assets.

As of December 31, 2019, our accumulated deficit aggregated $718.8 million primarily as a result of previous provisions for credit losses recorded between 2008 and 2010 (due primarily to the erosion of the U.S. and global real estate and credit markets during those periods) relating to the decrease in the fair value of the collateral securing our legacy loan portfolio and impairment charges relating to the value of real estate owned (“REO”) assets acquired primarily through foreclosure, as well as on-going net operating losses resulting from the lack of income-producing assets.

The Company has met its near-term liquidity requirements by, among other things, obtaining outside financing, selling mortgage loans, and selling the majority of our legacy real estate assets. During the fourth quarter of 2019, in order to meet impending liquidity requirements, we sold one of our mezzanine loan investments with a principal balance of $12.3 million at a discount incurring a loss of $2.6 million, reflected in provision for (recovery of) credit losses, net in the consolidated statements of operations. During the year ended December 31, 2019, we generated net cash of approximately $0.8 million (after payment of closing expenses and related indebtedness) from the sale of certain REO assets. In addition, subsequent to December 31, 2019, we sold a commercial office building (the “Broadway Tower”) in a cash sale for $19.5 million which, after selling expenses and payoff of underlying secured indebtedness of $11.0 million, netted $8.0 million in cash to the Company (Note 18).

In September 2019, the Company entered into a Series B-4 Cumulative Convertible Preferred Stock Subscription Agreement with JPMorgan Chase Funding Inc. (“JPM Funding”), pursuant to which JPM Funding purchased 1,875,000 shares of our Series B-4 Cumulative Convertible Preferred Stock, $0.01 par value per share, (the “Series B-4 Preferred Stock”), at a purchase price of $3.20 per share, for a total purchase price of $6.0 million. The Company is using the proceeds from the sale of these shares for general corporate purposes. Dividends on the Series B-4 Preferred Stock accrue at the rate of 5.65% per year.

In connection with the acquisition of MacArthur Place in October 2017, the Company entered into a building loan agreement and related agreements with MidFirst Bank in the amount of $32.3 million (the “MacArthur Loan”). The MacArthur Loan was modified during the first quarter of 2019 to increase the loan facility to $37.0 million and establish certain additional reserve accounts in the amount of $2.0 million for the completion of certain capital projects. The MacArthur Loan has an initial maturity date of October 1, 2020, with two one-year extension options available, contingent upon construction completion and repayment guarantees provided by the Company.

The modified MacArthur Loan required the Company to fund minimum equity of $27.7 million, all of which has been funded as of December 31, 2019. The Company has provided a loan repayment guaranty equal to 50% of the original loan’s principal amount, as well as a guaranty of interest and operating deficits and other customary non-recourse carve-out matters such as bankruptcy and environmental matters. Under the guarantees, the Company is required to maintain a minimum Tangible Net Worth, as defined, of $50.0 million and minimum liquidity of $5.0 million throughout the loan term. The Company was in full compliance with such financial covenants as of December 31, 2019. In addition, the MacArthur Loan requires MacArthur Place to establish various operating and reserve accounts at MidFirst Bank which are subject to a cash management agreement. In the event of default, MidFirst Bank has the ability to take control of such accounts for the allocation and distribution of proceeds in accordance with the cash management agreement.

Commencing in November 2017, the Company sponsored an offering under SEC Regulation D of up to $25.0 million of preferred limited liability company interests (the “Preferred Interests”) of the L’Auberge de Sonoma Resort Fund, LLC (the “Hotel Fund”), which was fully subscribed by the second quarter of 2019. The net proceeds of this offering were primarily used to (i) reimburse the Company for its initial $17.8 million common investment in the Hotel Fund and (ii) fund certain renovations and operating losses at the hotel.

As of December 31, 2019, we had cash and cash equivalents of $7.9 million, REO assets held for sale with a carrying value of $25.5 million and other REO assets with a carrying value of $33.3 million that we seek to dispose of within the next 12 months. As mentioned above, we sold our Broadway Tower commercial office building subsequent to December 31, 2019. We continue to evaluate potential disposition strategies for our remaining REO assets and to seek additional sources of debt and equity for investment and working capital purposes.

As described in Note 15, at any time after July 24, 2020, each holder of our Series B-1 and B-2 Preferred Stock may require the Company to redeem, out of legally available funds, the shares held by such holder at a price (the “Redemption Price”) equal to the greater of (i) 150% of the sum of the original price per share plus all accrued and unpaid dividends or (ii) the sum of the tangible book value of the Company per share of voting Common Stock plus all accrued and unpaid dividends as of the date of redemption. As of December 31, 2019, the aggregate Redemption Price for the Series B-1 and Series B-2 Preferred Stock would be approximately $39.6 million. In addition, pursuant to an agreement to extend the Redemption Date, a cash payment in the aggregate amount of $2.6 million is due and payable to the holders of the Series B-1 and B-2 Preferred Stock on July 24, 2020 whether or not a redemption is requested. As further described in Note 15, the holders of the Series B-3 and B-4 Preferred Stock may require the Company to redeem, out of legally available funds, those share for $11.6 million and $8.7 million, respectively. The current holders of our Series B Preferred Stock are collectively referred to herein as the “Series B Investors”. We are presently in discussions with the Series B Investors regarding a restructuring of some or all of the terms of these securities. There is no assurance, however, that all or any of the Series B Investors will agree to restructure these securities, or if so, whether the terms will be beneficial to the Company.

We expect our primary sources of liquidity over the next twelve months to consist of our proceeds from the disposition of our existing REO assets, proceeds from borrowings and equity issuances, current cash, revenues from ownership or management of hotels, and investment income.

Historically, we have used proceeds from the issuance of preferred equity and/or debt, proceeds from the sale of our REO assets, and the liquidation of mortgages and related investments to satisfy our working capital requirements. During the fourth quarter of 2019, in order to meet impending liquidity requirements, we sold one of our mezzanine loan investments with a principal balance of $12.3 million at a discount incurring a loss of $2.6 million. As described above, we sold our Broadway Tower commercial office building in January 2020, netting $8.0 million in cash to the Company after payment of related debt. We also are in discussions with the holders of our Series B Preferred Stock regarding a restructuring or modification of those securities and our obligations. There can be no assurance that these efforts will be successful or that we will sell our remaining REO assets in a timely manner or in obtaining additional or replacement financing, if needed, to sufficiently fund our future operations, redeem our Series B-1 and B-2 Preferred Stock if so required, repay existing debt, or to implement our investment strategy. In the event we are unsuccessful in negotiating a deferral or restructuring of the terms of our Series B-1 and B-2 Preferred Stock, we will be required to fund the redemption of $39.6 million. In the absence of proceeds from asset sales, equity issuances or borrowings to fund the Redemption Price, the required redemption would likely render the Company insolvent. Moreover, our failure to generate sustainable earning assets and to successfully liquidate a significant portion of our REO assets will have a material adverse effect on our business, results of operations and financial position.

As more fully described in Note 18 to the consolidated financial statements, the Company may be materially impacted by the outbreak of a novel coronavirus (COVID-19), which was declared a global pandemic by the World Health Organization in March 2020. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

In the absence of favorably resolving the matters described above, the collective nature of these uncertainties create substantial doubt about our ability to continue as a going concern for a period beyond one year from the date of issuance of these consolidated financial statements. The accompanying consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. They do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.