Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AMBASE CORP | |
Entity Central Index Key | 0000020639 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 40,737,751 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Address, State or Province | FL | |
Entity Address, Country | US |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating expenses: | ||||
Compensation and benefits | $ 1,709 | $ 306 | $ 2,052 | $ 830 |
Professional and outside services | 396 | 840 | 872 | 1,658 |
Property operating and maintenance | 1 | 14 | 9 | 46 |
Insurance | 43 | 19 | 89 | 81 |
Other operating | 18 | 23 | 33 | 50 |
Total operating expenses | 2,167 | 1,202 | 3,055 | 2,665 |
Operating income (loss) | (2,167) | (1,202) | (3,055) | (2,665) |
Interest income | 19 | 3 | 19 | 4 |
Interest expense | 0 | 0 | 0 | (10) |
Gain on sale of real estate owned | 0 | 0 | 0 | 3,278 |
Income (loss) before income taxes | (2,148) | (1,199) | (3,036) | 607 |
Income tax expense (benefit) | 1 | 2 | (29) | 4 |
Net income (loss) | $ (2,149) | $ (1,201) | $ (3,007) | $ 603 |
Net income (loss) per common share - basic (in dollars per share) | $ (0.05) | $ (0.03) | $ (0.07) | $ 0.01 |
Weighted average common shares outstanding - basic (in shares) | 40,738 | 40,738 | 40,738 | 40,738 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash and cash equivalents | $ 4,767 | $ 237 |
Federal income tax receivable | 0 | 10,742 |
Deferred tax asset | 10,741 | 10,741 |
Other assets | 0 | 33 |
Total assets | 15,508 | 21,753 |
Liabilities: | ||
Accounts payable and accrued liabilities | 378 | 414 |
Other liabilities | 0 | 0 |
Total liabilities | 378 | 414 |
Litigation funding agreement (Note 9) | 0 | 3,202 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock ($0.01 par value, 85,000 authorized in 2019 and 85,000 authorized in 2018, 46,410 issued and 40,738 outstanding in 2019 and 46,410 issued and 40,738 outstanding in 2018) | 464 | 464 |
Additional paid-in capital | 548,304 | 548,304 |
Accumulated deficit | (528,470) | (525,463) |
Treasury stock, at cost - 2019 - 5,672 shares; and 2018 - 5,672 shares | (5,168) | (5,168) |
Total stockholders' equity | 15,130 | 18,137 |
Total liabilities and stockholders' equity | $ 15,508 | $ 21,753 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 85,000 | 85,000 |
Common stock, shares issued (in shares) | 46,410 | 46,410 |
Common stock, shares outstanding (in shares) | 40,738 | 40,738 |
Treasury stock, at cost (in shares) | 5,672 | 5,672 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2017 | $ 464 | $ 548,304 | $ (525,798) | $ (5,168) | $ 17,802 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 0 | 0 | 1,804 | 0 | 1,804 |
Balance at Mar. 31, 2018 | 464 | 548,304 | (523,994) | (5,168) | 19,606 |
Balance at Dec. 31, 2017 | 464 | 548,304 | (525,798) | (5,168) | 17,802 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 603 | ||||
Balance at Jun. 30, 2018 | 464 | 548,304 | (525,195) | (5,168) | 18,405 |
Balance at Mar. 31, 2018 | 464 | 548,304 | (523,994) | (5,168) | 19,606 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 0 | 0 | (1,201) | 0 | (1,201) |
Balance at Jun. 30, 2018 | 464 | 548,304 | (525,195) | (5,168) | 18,405 |
Balance at Dec. 31, 2018 | 464 | 548,304 | (525,463) | (5,168) | 18,137 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 0 | 0 | (858) | 0 | (858) |
Balance at Mar. 31, 2019 | 464 | 548,304 | (526,321) | (5,168) | 17,279 |
Balance at Dec. 31, 2018 | 464 | 548,304 | (525,463) | (5,168) | 18,137 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (3,007) | ||||
Balance at Jun. 30, 2019 | 464 | 548,304 | (528,470) | (5,168) | 15,130 |
Balance at Mar. 31, 2019 | 464 | 548,304 | (526,321) | (5,168) | 17,279 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 0 | 0 | (2,149) | 0 | (2,149) |
Balance at Jun. 30, 2019 | $ 464 | $ 548,304 | $ (528,470) | $ (5,168) | $ 15,130 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,007) | $ 603 |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities | ||
Gain on sale of real estate owned | 0 | (3,278) |
Other income | 0 | 0 |
Changes in operating assets and liabilities: | ||
Federal income tax receivable | 10,742 | 0 |
Other assets | 33 | 19 |
Accounts payable and accrued liabilities | (36) | 184 |
Other liabilities | 0 | 0 |
Net cash provided (used) by operating activities | 7,732 | (2,472) |
Cash flows from investing activities: | ||
Proceeds from sale of real estate owned, net | 0 | 4,910 |
Net cash provided (used) by investing activities | 0 | 4,910 |
Cash flows from financing activities: | ||
Payoff of loan payable - related party | 0 | (2,546) |
Proceeds from loan payable - related party | 0 | 250 |
Repayment of litigation funding agreement | (3,672) | 0 |
Proceeds from litigation funding agreement | 470 | 1,198 |
Net cash provided (used) by financing activities | (3,202) | (1,098) |
Net change in cash and cash equivalents | 4,530 | 1,340 |
Cash and cash equivalents at beginning of period | 237 | 70 |
Cash and cash equivalents at end of period | 4,767 | 1,410 |
Supplemental cash flow disclosure: | ||
Income taxes refunded (paid) | $ 10,742 | $ (5) |
The Company and Basis of Presen
The Company and Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
The Company and Basis of Presentation [Abstract] | |
The Company and Basis of Presentation | Note 1 – The Company and Basis of Presentation The accompanying condensed consolidated financial statements of AmBase Corporation and subsidiaries (“AmBase” or the “Company”) are unaudited and subject to year-end adjustments. All material intercompany transactions and balances have been eliminated. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal recurring adjustments unless otherwise disclosed, necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows. Results for interim periods are not necessarily indicative of results for the full year. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that it deems reasonable, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates and assumptions. The unaudited interim condensed consolidated financial statements presented herein are condensed and should be read in conjunction with the Company’s consolidated financial statements filed in its Annual Report on Form 10‑K for the year ended December 31, 2018. The Company is engaged in the management of its assets and liabilities. At June 30, 2019, the Company’s assets consisted primarily of cash and cash equivalents and tax assets. In January 2019, the Company filed its 2018 federal income tax return seeking a refund of alternative minimum tax (“AMT”) credit carryforwards as provided for in the 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”). This amount was reflected as a federal tax receivable at December 31, 2018. In March 2019, the Company received a federal tax refund based on the Company’s 2018 federal income tax return as filed. The remaining AMT credit carryforward amounts are reflected as a deferred tax asset at June 30, 2019, based on tax returns to be filed in future years. For additional information see Note 7. In May 2019, the Company and Mr. Richard A. Bianco, the Company’s Chairman, President and Chief Executive Officer (“Mr. R. A. Bianco”) entered into an amendment to the Litigation Funding Agreement between the Company and Mr. R. A. Bianco relating to the litigation in connection with the 111 West 57 th Note 9. In April 2019, the Company paid compensation bonuses to its employees of $1,356,000. In January 2018, the Company sold its commercial office building in Greenwich, Connecticut. For additional information, see Note 3. In June 2013, the Company purchased an equity interest in a real estate development property through a joint venture agreement to purchase and develop real property located at 105 through 111 West 57 th Street in New York, New York th th On August 30, 2017, Spruce issued a Notice of Retention of Pledged Collateral in Full Satisfaction of Indebtedness. By purporting to accept the pledged collateral, pursuant to a strict foreclosure process, Spruce claims to have completed the retention of the collateral pledged by the junior mezzanine borrower, and therefore, the Company’s interest in the 111 West 57th Street Property (the “Strict Foreclosure”). Despite ongoing litigation challenging the legitimacy of the actions taken by the Sponsor, the lenders, and Property Owner in connection with the Strict Foreclosure as further discussed herein, in accordance with GAAP, the Company recorded an impairment of its equity investment in the 111 West 57th Property in 2017. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57 th While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57 th For additional information regarding the Company’s recording of an impairment of its equity investment in the 111 West 57 th th Note 4 Note 8. The Company has incurred operating losses and used cash for operating activities over the past several years. The Company has continued to keep operating expenses at a reduced level; however, there can be no assurance that the Company’s current level of operating expenses will not increase or that other uses of cash will not be necessary. The . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies New accounting pronouncements There are no new accounting pronouncements, except as noted below, that would likely materially affect the Company’s condensed consolidated financial statements. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), “Leases,” which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedient and elected the following accounting policy related to this standard update: - Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less. Adoption of this standard did not result in any operating lease right-of-use assets and corresponding lease liabilities as all Company leases meet the definition of short-term leases. The standard did not materially impact operating results or liquidity. |
Real Estate Sold
Real Estate Sold | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate Sold [Abstract] | |
Real Estate Sold | Note 3 – Real Estate Sold In January 2018, the Company sold its building in Greenwich, Connecticut, to Maria USA, Inc., an unaffiliated third party. A gain from the sale is reflected in the Company’s condensed consolidated statement of operations for the six months ended June 30, 2018. The Company used a portion of the sale proceeds to repay the full amount of the working capital loan plus accrued interest aggregating $2,623,000 to Mr. R. A. Bianco, and the working capital line of credit agreement was terminated. The remaining proceeds were used for working capital. Information relating to the sale of the Company’s real estate owned in Greenwich, Connecticut is as follows: (in thousands) Amounts Gross sales price $ 5,200 Less: Transactions costs (290 ) Net cash proceeds 4,910 Less: Real estate carrying value, (net of accumulated depreciation) (1,632 ) Net gain on sale of real estate $ 3,278 |
Investment in 111 West 57th Par
Investment in 111 West 57th Partners LLC | 6 Months Ended |
Jun. 30, 2019 | |
Investment in 111 West 57th Partners LLC [Abstract] | |
Investment in 111 West 57th Partners LLC | Note 4 – Investment in 111 West 57 th In June 2013, the Company purchased an equity interest in the 111 West 57 th th th th th Note 8. See below for additional information regarding the Company’s 111 West 57 th th In June 2013, 111 West 57 th th th th th th th Amounts relating to the Company’s initial June 2013 investment and other information relating to the 111 West 57 th ($ in thousands) Company’s aggregate initial investment $ 57,250 Company’s aggregate initial membership interest % 60.3 % Other members and Sponsor initial investment $ 37,750 Approximate gross square feet of project 346,000 The JV Agreement and related operating agreements generally provide that all distributable cash shall be distributed as follows: (i) first, 100% to the members in proportion to their percentage interests until Investment LLC has received distributions yielding a 20% internal rate of return as calculated; (ii) second, 100% to the Sponsor as a return of (but not a return on) any additional capital contributions made by the Sponsor on account of manager overruns; and (iii) thereafter, (a) 50% to the members in proportion to their respective percentage interests at the time of such distribution, and (b) 50% to the Sponsor. Additionally, the JV Agreement provides that (i) Mr. R. A. Bianco, his immediate family, and/or any limited liability company wholly-owned thereby, and/or a trust in which Mr. R. A. Bianco and/or his immediate family is the beneficiary, shall at all times own, in the aggregate, not less than 20% of the outstanding shares of AmBase; and (ii) Mr. R. A. Bianco shall remain the Chairman of the Board of Directors of AmBase for the duration of the JV Agreement. In March 2014, the Company entered into an amended and restated operating agreement for Investment LLC (the “Amended and Restated Investment Operating Agreement”) to grant a 10% subordinated participation interest in Investment LLC to as contingent future incentive for Mr. R. A. Bianco’s past, current and anticipated ongoing role to develop and commercialize the Company’s equity investment in the 111 West 57 th Property. Pursuant to the terms of the Amended and Restated Investment Operating Agreement, Mr. R.A. Bianco has no voting rights with respect to his interest in Investment LLC, and his entitlement to receive 10% of the distributions from Investment LLC is subject to the Company first receiving distributions equal to 150% of the Company’s initial aggregate investment in Investment LLC and the Joint Venture, plus any additional investments by the Company, and only with respect to any distributions thereafter. At the current time the Company has not expensed nor accrued any amounts relating to this subordinated participation interest, as no amount or range of amounts can be reasonably estimated or assured. During 2014, in connection with the funding of additional capital calls under the JV Agreement for required borrowing and development costs for the 111 West 57 th th th In accordance with the JV Agreement, Shortfall Capital Contributions may be treated either as a member loan or as a dilutive capital contribution by the funding party valued at one and one-half times the amount actually contributed. The Sponsor deemed the Shortfall Capital Contributions as dilutive capital contributions to the Company. The Company disagrees with the Sponsor’s investment percentage calculations. The Sponsor has taken the position that the Capital Contribution Requests, if taken together, would have caused the Company’s combined ownership percentage to be diluted to approximately 48%. The parties have a dispute with regard to the calculation of the revised investment percentages resulting from the Capital Contribution Requests, along with the treatment and allocation of these Shortfall Capital Contribution amounts. On June 30, 2015, 111 West 57 th th th th Information relating to the June 30, 2015 financing for 111 West 57 th (in thousands) Financing obtained by 111 West 57 th $ 400,000 Financing obtained by 111 West 57 th $ 325,000 Annaly CRE LLC initial mortgage and acquisition loan repaid $ 230,000 In April 2016, AmBase initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“ AmBase v. 111 West 57 th Sponsor LLC, et al.”) (the “111 West 57 th Action”). The defendants in that litigation are 111 West 57th Sponsor LLC, 111 West 57th JDS LLC, PMG West 57th Street LLC, 111 West 57th Control LLC, 111 West 57th Developer LLC, 111 West 57 th KM Equity LLC, 111 West 57 th KM Group LLC, Kevin Maloney, Matthew Phillips, Michael Stern, Ned White, 111 Construction Manager LLC, Property Markets Group, Inc., JDS Development LLC, JDS Construction Group LLC (collectively, “Defendants”) and nominal defendant 111 West 57th Partners LLC . In th Note 8. In December 2016, the Sponsor proposed for approval a “proposed budget” (the “Proposed Budget”), which the Sponsor claims reflected an increase in other costs resulting in the need for additional funding in order to complete the project. The Company disputes, among other items, the calculation of the percentage increase of hard costs shown in the Proposed Budget. The Company believes the aggregate projected hard costs in the Proposed Budget exceed a contractually stipulated limit as a percentage of the hard costs set forth in the prior approved budget, thus allowing Investment LLC the option to exercise its Equity Put Right. Consequently, subsequent to the Sponsor’s presentation of the Proposed Budget, Investment LLC notified the Sponsor that it was exercising its Equity Put Right pursuant to the JV Agreement. The Sponsor refused to honor the exercise of Investment LLC’s Equity Put Right. The Sponsor claims, among other things, that the conditions precedent were not met because it claims that the increase in aggregate hard costs in the Proposed Budget does not exceed the contractually stipulated limit that would allow the exercise of the Equity Put Right. The Company further contends that a portion of the Proposed Budget increases are manager overruns (as defined in the JV Agreement) and thus should be paid for by the Sponsor. The Sponsor denies that the Proposed Budget increases were manager overruns. The Company continues to challenge the nature and substance of the Proposed Budget increases and how they should be treated pursuant to the JV Agreement. The Sponsor claimed that additional borrowings of $60 million to $100 million were needed to complete the project. Shortly thereafter, the Sponsor informed the Company that Apollo had indicated that due to budget increases, it believed the current loan was “out of balance” (meaning, according to Apollo, the projected budget exceeds the original budget approved in connection with the loan); and thus 111 West 57th Partners LLC, or its subsidiaries would need additional funding in order to bring the loan back into balance. The Company considered approving the additional financing but informed the Sponsor that it had concerns about the Proposed Budget and the implications of the Proposed Budget, as well as other questions which needed to be addressed first. In March 2017, the Company and Mr. R. A. Bianco entered into an agreement for Mr. R. A. Bianco to provide to the Company a financial commitment in the form of a line of credit up to ten million dollars ($10,000,000) or additional amount(s) as may be necessary and agreed to enable AmBase to contribute capital to Investment LLC and/or other affiliated subsidiaries of the Company to meet capital calls for the 111 West 57 th Around this time, Apollo provided loan forbearances to the borrowers and guarantors in order to allow the Sponsor time (while the building continued to be built) to raise the additional financing that Sponsor claimed would be needed in order to complete the 111 West 57th project. This forbearance period ended on June 29, 2017. Around this date, the Company was advised that Apollo sold a portion of the mezzanine loan—broken off as a junior mezzanine loan—to an affiliate of Spruce Capital Partners LLC, (“Spruce”) (the “Junior Mezzanine Loan”). On June 30, 2017, Spruce declared an event of default under the Junior Mezzanine Loan and demanded immediate payment of the full outstanding balance of the Junior Mezzanine Loan. Spruce then gave notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”). On July 25, 2017, the Company filed a complaint against Spruce and the Sponsor and requested injunctive relief halting the Strict Foreclosure from the New York State Supreme Court for New York County, (the “NY Court”) Index No. 655031/2017, (the “111 West 57 th Spruce Action”) The defendants in the 111 West 57 th Spruce action were 111 W57 Mezz Investor, LLC, Spruce Capital Partners LLC, 111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57 th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the 111 West 57 th Spruce Action or any other action. th Note 8. On August 30, 2017, Spruce issued a Notice of Retention of Pledged Collateral in Full Satisfaction of Indebtedness. By purporting to accept the pledged collateral, pursuant to a Strict Foreclosure process, Spruce claims to have completed the retention of the collateral pledged by the junior mezzanine borrower, and therefore, the Company’s interest in the 111 West 57th Street Property. In June 2018, the Company initiated another litigation in the NY Court, Index No. 655031/2017, (the “Apollo Action”) The defendants in the Apollo Action are ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, AGRE Debt 1 – 111 W 57, LLC, and Apollo Commercial Real Estate Finance, Inc. (collectively, the “Apollo Defendants”). West 57 th Property and tortuously interfered with the JV Agreement. Note 8. As further discussed herein, despite ongoing litigation challenging the legitimacy of the actions taken by the Sponsor, the lenders, and Property Owner in connection with the Strict Foreclosure, in accordance with GAAP, the Company recorded an impairment for the full amount of its equity investment in the 111 West 57 th th In May 2019, the Company’s subsidiary, 111 West 57th Investment LLC (“Investment LLC”) initiated a case in the New York State Supreme Court for New York County (the “NY Court”), Index No. 653067/2019 (the “Property Owner Action”). The defendant in that litigation is 111 West 57th Property Owner LLC (“Property Owner”), which owns title to the 111 West 57th Street Property, and the nominal defendants are 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC. Investment LLC alleges that the Strict Foreclosure was invalid and seeks to impose a constructive trust over the 111 West 57 th Part I – Item 1 – Note 8 With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is continuing to pursue various legal courses of action, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57 th The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57 th th th Note 8. While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57 th |
Savings Plan
Savings Plan | 6 Months Ended |
Jun. 30, 2019 | |
Savings Plan [Abstract] | |
Savings Plan | Note 5 - Savings Plan The Company sponsors the AmBase 401(k) Savings Plan (the “Savings Plan”), which is a “Section 401(k) Plan” within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”). The Savings Plan permits eligible employees to make contributions of a percentage of their compensation, which are matched by the Company at a percentage of the employees’ elected deferral. Employee contributions to the Savings Plan are invested at the employee’s discretion, in various investment funds. The Company’s matching contributions are invested in the same manner as the compensation reduction contributions. All contributions are subject to maximum limitations contained in the Code. The Company’s matching contributions to the Savings Plan, charged to expense, were as follows: ($ in thousands Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Company matching contributions $ 12 $ 3 $ 25 $ 28 Employer match % 33 % 33 % 33 % 33 % |
Common Stock Repurchase Plan
Common Stock Repurchase Plan | 6 Months Ended |
Jun. 30, 2019 | |
Common Stock Repurchase Plan [Abstract] | |
Common Stock Repurchase Plan | Note 6 – Common Stock Repurchase Plan The Company’s common stock repurchase plan (the “Repurchase Plan”) allows for the repurchase by the Company of its common stock in the open market. The Repurchase Plan is conditioned upon favorable business conditions and acceptable prices for the common stock. Purchases under the Repurchase Plan may be made, from time to time, in the open market, through block trades or otherwise. Depending on market conditions and other factors, purchases may be commenced or suspended any time or from time to time without prior notice. Pursuant to the Repurchase Plan, the Company has repurchased shares of common stock from unaffiliated parties at various dates at market prices at their time of purchase, including broker commissions. Information relating to the Repurchase Plan is as follows: (in thousands Six months ended June 30, 2019 Common shares repurchased to treasury during period - Aggregate cost of shares repurchased during period $ - (in thousands) June 30, 2019 Total number of common shares authorized for repurchase 10,000 Total number of common shares repurchased to date 6,226 Total number of shares that may yet be repurchased 3,774 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 7 - Income Taxes The Company and its domestic subsidiaries file a consolidated federal income tax return. The Company recognizes both the current and deferred tax consequences of all transactions that have been recognized in the condensed consolidated financial statements, calculated based on the provisions of enacted tax laws, including the tax rates in effect for current and future years. Net deferred tax assets are recognized immediately when a more likely than not criterion is met; that is, a greater than 50% probability exists that the tax benefits will actually be realized sometime in the future. The Company has not been notified of any potential tax audits by any federal, state or local tax authorities. As such, the Company believes the statutes of limitations for the assessment of additional federal and state tax liabilities are generally closed for tax years prior to 2016. Interest and/or penalties related to uncertain tax positions, if applicable, would be included as a component of income tax expense (benefit). The accompanying financial statements do not include any amounts for interest and/or penalties. The Company recognized an income tax expense of $1,000 and an income tax benefit of $29,000 for the three months and six months ended June 30, 2019, respectively. For the three and six months ended June 30, 2018, the Company recognized an income tax provision of $2,000 and $4,000, respectively. The income tax expense for the three months ended June 30, 2019, is attributable to a provision for a tax on capital imposed by the state jurisdictions. The income tax benefit for the six month period ended June 30, 2019, includes an additional refund of $30,000 received in March 2019 relating to the AMT credit carryforwards. State income tax amounts for the three months and six months ended June 30, 2018, reflect a provision for a tax on capital imposed by the state jurisdictions. The utilization of certain carryforwards and carrybacks is subject to limitations under U.S. federal income tax laws. Based on the Company’s federal tax returns as filed and to be filed, the Company estimates it has federal NOL carryforwards available to reduce future federal taxable income which would expire if unused, as indicated below. The federal NOL carryforwards as of December 31, 2018, are as follows: Tax Year Originating Tax Year Expiring Amount 2006 2026 $ 500,000 2007 2027 12,700,000 2008 2028 4,600,000 2009 2029 2,400,000 2010 2030 1,900,000 2011 2031 1,900,000 2013 2033 3,700,000 2014 2034 4,900,000 2015 2035 4,200,000 2016 2036 3,400,000 2017 2037 68,000,000 2018 - 500,000 $ 108,700,000 AMT credit carryforwards available, which can be used to offset income generated in future years which are not subject to expiration, are as follows : Amount AMT Credits carryforwards $ 10,741,000 As noted above the Company has AMT credit carryforwards from prior tax years. In accordance with the 2017 Tax Act, AMT credit carryforwards are expected to be claimed by the Company as refundable on tax returns filed and/or to be filed in future tax years and at various percentages as noted below. The Company’s AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year are as follows: Tax Year (a) Declining balance of the AMT credit carryforward amount(s) available for each tax year (a)(b) % of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year (a)(b) 2019 $ 10,741,000 50 % $ 5,371,000 2020 5,371,000 50 % 2,685,000 2021 2,685,000 100 % 2,685,000 $ 10,741,000 (a) Assumes no regular federal income tax liability in tax years presented above which would reduce any AMT credit carryforward amount(s) ultimately refunded. (b) See herein with regard to the filing of the Company’s 2018 federal income tax return and the March 2019 federal tax refund received. In January 2019, the Company filed its 2018 federal income tax return seeking a refund of AMT credit carryforwards as provided for in the 2017 Tax Act. This amount was reflected as a federal tax receivable at December 31, 2018. In March 2019, the Company received a $10.7 million federal tax refund based on the Company’s 2018 federal income tax return as filed. The remaining AMT credit carryforward amounts of $10.7 million are reflected as a deferred tax asset at June 30, 2019, based on tax returns to be filed in future years. The Company’s management is continuing to work closely with outside advisors on the Company’s tax matters as they relate to the 2017 Tax Act and on the various federal tax return matters for the numerous interrelated tax years, including the provisions and application of the 2017 Tax Act along with the amounts and timing of any AMT credit carryforward refunds. The IRS typically has broad discretion to examine taxpayer tax returns, even after refunds have been paid to taxpayers, which could result in adjustments to AMT credit carryforward amounts refunded and/or claimed as refundable and/or AMT credit carryforward amounts ultimately received. The AMT credit carryforward amounts from prior tax years and related refund(s) received and/or projected to be received could potentially be subject to IRS or other tax authority audits, including possible IRS Joint Committee review and/or approval. The Company cannot predict whether or not the IRS and/or other tax authorities will review the Company’s tax returns filed, to be filed and/or as filed in prior years, and/or if they will seek repayment from the Company of any amounts already refunded as a result of an IRS review, if any. Moreover, applicable provisions of the Code The 2017 Tax Act makes broad and complex changes to the Code, including, among other changes, significant changes to the U.S. corporate tax rate and certain other changes to the Code that impact the taxation of corporations. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue additional guidance in the future on how provisions of the 2017 Tax Act will be applied or otherwise administered that differs from our interpretation. As we complete our analysis of the 2017 Tax Act, and IRS regulations and guidance issued in respect thereof and collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to provisional amounts that we have recorded that may materially impact our provision for income taxes in the period in which the adjustments are made. Additionally, there is risk relating to assumptions regarding the outcome of tax matters, The Company was a plaintiff in a legal proceeding seeking recovery of damages from the United States Government for the loss of the Company’s wholly-owned subsidiary, Carteret Savings Bank, F.A. (the “SGW Legal Proceedings”). A settlement agreement in the SGW Legal Proceedings between the Company, the Federal Deposit Insurance Corporation-Receiver (“FDIC-R”) and the Department of Justice (“DOJ”) on behalf of the United States of America (the “United States”), was executed (the “SGW 2012 Settlement Agreement”) which was approved by the United States Court of Federal Claims (the “Court of Federal Claims”) in October 2012. As part of the SGW 2012 Settlement Agreement, the Company is entitled to a tax gross-up when any federal taxes are imposed on the settlement amount. Based on the Company’s 2012 federal income tax return as filed, in March 2013, the Company paid $501,000 of federal income taxes attributable to AMT rate calculations (the “2012 AMT Amount”, i.e. $501,000) resulting from the SGW 2012 Settlement Agreement. In May 2013, the Company filed a motion with the Court of Federal Claims seeking a tax gross-up from the United States for the 2012 AMT Amount, plus applicable tax consequences relative to the reimbursement of this amount. Subsequently, Senior Judge Smith filed an order directing the United States to pay AmBase reimbursement for 2012 AMT Amount as provided for in the Settlement Agreement. In September 2013, the Company received reimbursement for the 2012 AMT Amount. On August 6, 2013, Senior Judge Smith issued an opinion which addressed the relief sought by AmBase. In summary, the court held that the Settlement Agreement is a contract and that it entitles the Company to receive both “(1) the amount of the tax consequences resulting from taxation of the damages award plus (2) the tax consequences of receiving the first component.” But the court did not award additional damages for the second component of the damages at that time given the remaining uncertainty surrounding the ultimate tax treatment of the settlement proceeds and the gross-up, as well as uncertainty relating to the Company’s future income. The Court indicated that either the Company or the government is entitled to seek further relief “if, and when, the facts justify.” The 2012 AMT Amount is part of the Company’s current aggregate AMT credit carryforwards available and refunded in accordance with the 2017 Tax Act. See herein and Part I – Item 1 – Note 7 . In July 2019, the Company received a letter from the Federal Deposit Insurance Corporation (“FDIC”), requesting the Company reimburse the FDIC for the 2012 AMT Amount (i.e. $501,000) that the FDIC had previously reimbursed the Company. The FDIC requested the amount be reimbursed on a pro-rata basis in accordance with the same percentages that the AMT credits are refundable to the Company in accordance with the 2017 Tax Act and as further set forth herein above. The Company is currently reviewing the FDIC request, along with the SGW 2012 Settlement Agreement and Court of Federal Claims August 2013 ruling, with its outside legal and tax advisors. The Company is unable to predict at this time whether the 2012 AMT Amount is refundable back to the FDIC in 2019 and future years. Based on the Company’s state tax returns as filed and to be filed, the Company estimates that it has state NOL carryforwards to reduce future state taxable income, which would expire if unused. The state NOL carryforwards as of December 31, 2018, are as follows: Tax Year Originating Tax Year Expiring Amount 2011 2031 $ 1,800,000 2013 2033 2,700,000 2014 2034 4,200,000 2015 2035 4,100,000 2016 2036 2,800,000 2017 2037 68,000,000 2018 2038 500,000 $ 84,100,000 The Company has a deferred tax asset arising primarily from NOL carryforwards and AMT Credit carryforwards. At December 31, 2017, a valuation allowance was released in relation to the AMT credit carryforwards which are projected to be refundable as part of the 2017 Tax Act enacted in December 2017. In 2018, the Company released its valuation allowance in relation to additional AMT credit carryforwards available for refund (under the 2017 Tax Act), due to the elimination of reductions for the effect of sequestration amounts. A full valuation allowance remains on the remaining deferred tax asset amounts, as management has no basis to conclude that realization is more likely than not. Management does not believe that any significant changes in unrecognized income tax benefits are expected to occur over the next year. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jun. 30, 2019 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | Note 8 - Legal Proceedings From time to time, the Company and its subsidiaries may be named as a defendant in various lawsuits or proceedings. At the current time except as set forth below, the Company is unaware of any legal proceedings pending against the Company. The Company intends to aggressively contest all litigation and contingencies, as well as pursue all sources for contributions to settlements. The Company is a party to material legal proceedings as follows: AmBase Corp., et al. v. 111 West 57 th Sponsor LLC, et al. In April 2016, AmBase initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“ AmBase v. 111 West 57 th Sponsor LLC, et al.”) (the “111 West 57 th Action”). The defendants in that litigation are 111 West 57th Sponsor LLC, 111 West 57th JDS LLC, PMG West 57th Street LLC, 111 West 57th Control LLC, 111 West 57th Developer LLC, 111 West 57 th KM Equity LLC, 111 West 57 th KM Group LLC, Kevin Maloney, Matthew Phillips, Michael Stern, Ned White, 111 Construction Manager LLC, Property Markets Group, Inc., JDS Development LLC, JDS Construction Group LLC (collectively, “Defendants”) and nominal defendant 111 West 57th Partners LLC . In the current version of the complaint, AmBase alleges that Defendants violated multiple provisions in the JV Agreement, including by failing to honor the exercise of AmBase’s contractual “equity put right” as set forth in the JV Agreement (the “Equity Put Right”), and committed numerous acts of fraud and breaches of fiduciary duty. AmBase is seeking compensatory damages, as well as treble damages under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), punitive damages, indemnification and equitable relief including a declaration of the parties’ rights, and an accounting. The Company has also demanded from the Sponsor access to the books and records for the 111 West 57 th Property which the Sponsor refused, claiming they have provided all books and records as required. The Defendants filed motions to dismiss, and on January 12, 2018, the NY Court issued an opinion allowing some of AmBase’s claims to go forward and dismissing others. Among other claims that the NY Court declined to dismiss was AmBase’s claim that the Defendants violated the implied covenant of good faith and fair dealing by frustrating AmBase’s Equity Put Right. Claims that the NY Court dismissed included AmBase’s claim that the Defendants breached their contract with AmBase by financing capital contributions for the project through funds obtained from third parties. On January 16, 2018, some of the Defendants wrote to the NY Court suggesting that the opinion contained certain clerical errors and was missing a page. On January 18, 2018, the NY Court removed its previous opinion from the docket and on January 29, 2018, posted a revised opinion. A discovery conference in this case was held on February 27, 2018. On April 27, 2018, the Company filed a third amended complaint adding federal RICO claims, and new claims for declaratory judgment, breach of contract, fraud, and breach of fiduciary duty, based on information discovered during the course of discovery and events that have transpired since the Company filed its previous complaint in the 111 West 57th Action. On October 25, 2018, the Federal Court issued an order granting the defendants’ motion to dismiss the Company’s RICO claims and declined to exercise supplemental jurisdiction over the Company’s state-law claims. The next month, the Company noticed an appeal, and on January 11, 2019, it served its opening brief in that appeal. The United States Court of Appeals for the Second Circuit (the “Appeals Court”) granted the Company’s motion to file its brief under seal and on the public docket in redacted form. Subsequently, in February 2019 the Defendant’s filed their response brief and in March 2019, the Company filed its reply brief. Oral argument at the Appeals Court is scheduled for August 20, 2019. For additional information with regard to the Company’s investment in the 111 West 57 th Property, see Note 4 . AmBase Corp., et al. v. Spruce Capital Partners, et al. 655031/2017, (the “111 West 57 th Spruce Action”) The defendants in the 111 West 57 th Spruce action were 111 W57 Mezz Investor, LLC, Spruce Capital Partners LLC, 111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57 th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the 111 West 57 th Spruce Action or any other action. Spruce had given notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”). After the Sponsor refused to object to Spruce’s proposal on behalf of the junior mezzanine borrower, and Spruce refused to commit to honor Investment LLC’s objection on its own behalf, the Company initiated the 111 West 57 th Note 4 On July 26, 2017, the NY Court issued a temporary restraining order barring Spruce from accepting the collateral, pending a preliminary injunction hearing scheduled for August 14, 2017. Spruce and the Sponsor subsequently filed papers in opposition to the request for a preliminary injunction and cross-motions to dismiss and quash subpoenas. On August 14, 2017, the NY Court postponed the hearing until August 28, 2017, keeping the temporary restraining order preventing a Strict Foreclosure in effect until the August 28, 2017 hearing. Subsequently the Company filed response briefs in support of their request for injunctive relief halting the Strict Foreclosure process and briefs in opposition to the motions to quash the subpoenas. On August 28, 2017, the NY Court held a preliminary injunction hearing, lifted the temporary restraining order, denied Plaintiffs’ request for a preliminary injunction, and granted Defendants’ cross-motions. In order to prevent the Strict Foreclosure process from going forward, the Company immediately obtained an interim stay from the New York Supreme Court Appellate Division, First Judicial Department (“Appellate Division”). That stay remained in place until four (4) P.M. August 29, 2017, permitting the Company to obtain an appealable order, notice an appeal, and move for a longer-term stay or injunctive relief pending appeal. The Appellate Division held a hearing on August 29, 2017, to consider the Company’s motion for an interim stay or injunctive relief pending appeal, both of which it denied, thus allowing the purported Strict Foreclosure to move forward. On August 30, 2017, Spruce issued a Notice of Retention of Pledged Collateral in Full Satisfaction of Indebtedness. By purporting to accept the pledged collateral, pursuant to a Strict Foreclosure process, Spruce claims to have completed the retention of the collateral pledged by the junior mezzanine borrower, and therefore, the Company’s interest in the 111 West 57 th th In January 2019, the Appellate Division issued a decision that resolves the Company’s appeal from the order denying a preliminary injunction and dismissing its claims. The Appellate Division’s decision indicates that the Company’s request for a declaratory judgment was not moot “because plaintiff 111 West 57th Investment LLC (‘Investment’) might be entitled to damages from defendant 111 W57 Mezz Investor LLC (‘Junior Mezz Lender’) if it is judicially determined that Investment had the right to object to the Strict Foreclosure pursuant to Uniform Commercial Code.” The Appellate Division noted that the Company should be allowed to move for leave to amend to state claims for damages and/or the imposition of a constructive trust, as the dismissal of the Company’s claims was without prejudice. On March 19, 2019, the Company’s subsidiary, Investment LLC, moved for leave to amend the complaint in the 111 West 57th Spruce Action to state claims against 111 W57 Mezz Investor LLC (“Junior Mezz Lender”) for breaches of the Uniform Commercial Code and Pledge Agreement and various torts. The proposed amended complaint seeks the entry of a declaratory judgment, the impression of a constructive trust, permanent injunctive relief restraining Spruce from disposing of or encumbering the Property, and damages, including punitive damages. On May 1, 2019, Junior Mezz Lender stipulated to the amendment of the complaint, and on May 3, 2019, Investment LLC filed the executed stipulation and requested that the NY Court enter an order granting leave to file the proposed amended complaint. The amended complaint does not name the Company as a plaintiff or Spruce Capital Partners as a defendant. Pursuant to the terms of the May 1, 2019 stipulation, Junior Mezz Lender filed a motion to dismiss the amended complaint on May 31, 2019, Investment LLC filed its Opposition to the motion to dismiss on July 2, 2019 and Junior Mezz Lender filed its Reply on July 23, 2019. A hearing on the motion to dismiss is scheduled for September 24, 2019. Since the Company is not party to the Loan Agreements, it does not have access to communications with the lenders, except for those individual communications that the Sponsor has elected to share or that have been produced in the ongoing litigation. The Company has continued to demand access to such information, including access to the books and records for the 111 West 57 th th th th th Note 4. AmBase Corp., et al. v. ACREFI Mortgage Lending LLC, et al. 655031/2017, (the “Apollo Action”) The defendants in the Apollo Action are ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, AGRE Debt 1 – 111 W 57, LLC, and Apollo Commercial Real Estate Finance, Inc. (collectively, the “Apollo Defendants”). West 57 th Property and tortuously interfered with the JV Agreement. th Note 4. 111 West 57th Investment, LLC v. 111 West 57th Property Owner LLC th th th th , see Note 4 . With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is continuing to pursue various legal courses of action, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57th Property. The Company is continuing to pursue other options to realize the Company’s investment value and/or protect its legal rights. The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57 th th th Note 4. While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57 th IsZo Capital L.P. derivatively and on behalf of AmBase Corporation v. Richard A. Bianco, et al . IsZo Capital L.P. derivatively and on behalf of AmBase Corporation v. Richard A. Bianco, et al. th th Oral argument on the Company's motion to dismiss was held on the motion on October 19, 2018, at which time the Court decided that Alessandra Bianco, Richard Bianco, Jr., Jerry Carnegie, John Ferrara and Joseph Bianco should be dismissed as defendants in the case. The Court reserved decision as to dismissal of the balance of the case pending the Court's receipt of a transcript of the oral argument. On December, 26, 2018, the Court issued its written decision on the balance of the motion to dismiss. The Court dismissed a cause of action against R. A. Bianco, dismissed in part the single cause of action against Kenneth Schmidt, and dismissed a cause of action for declaratory judgment. What remains is a single cause of action against R. A. Bianco, a single cause of action against Kenneth Schmidt (in part), and a single declaratory judgment cause of action. The remaining defendants moved for re-argument of the December 26, 2018 decision, which motion was denied by the Court by Decision and Order entered on April 24, 2019. The remaining defendants, in addition, filed a Notice of Appeal as regards the December 26, 2018 decision on March 6, 2019, which appeal must be perfected on or before October 7, 2019. On January 15, 2019, the Company filed its answer to the surviving causes of action, as well as asserted counterclaims against the plaintiff. Under the current scheduling order, the parties are to appear in Court for a compliance conference on September 17, 2019. The end date for fact discovery including all depositions is November 7, 2019, all expert discovery is to be completed by February 13, 2020, and all discovery is to be completed no later than February 27, 2020, at which time the Note of Issue is to be filed. Summary Judgment motions, if any, are to be filed by March 27, 2020. The case is now in the discovery phase. The Company intends to continue to vigorously defend against plaintiff's action and prosecute its counterclaims. The Company can give no assurances regarding the outcome of the matters described herein. |
Litigation Funding Agreement
Litigation Funding Agreement | 6 Months Ended |
Jun. 30, 2019 | |
Litigation Funding Agreement [Abstract] | |
Litigation Funding Agreement | Note 9 – Litigation Funding Agreement In September 2017, the Company entered into a Litigation Funding Agreement (the “LFA”) with Mr. R. A. Bianco. Pursuant to the LFA, Mr. R. A. Bianco agreed to provide litigation funding to the Company, up to an aggregate amount of seven million dollars ($7,000,000) (the “Litigation Fund Amount”) to satisfy actual documented litigation costs and expenses of the Company, including attorneys’ fees, expert witness fees, consulting fees and disbursements in connection with the Company’s legal proceedings relating to the Company’s equity investment in the real property. After receiving substantial AMT tax credit carryforward refunds in March 2019, in light of the Company’s improved liquidity, in April 2019 the Company’s Board of Directors (the “Board”) authorized the establishment of a Special Committee of the Board (the “Special Committee”) to evaluate and negotiate possible changes to the LFA. The Special Committee was comprised exclusively of the independent directors on the Board. On May 20, 2019, after receiving approval from the Special Committee, the Company and Mr. R. A. Bianco entered into an amendment to the LFA (the “Amendment”) which provides for the following: (i) the repayment of $3,672,000 in funds previously provided to the Company by Mr. R. A. Bianco pursuant to the LFA (the “Advanced Amount”), (ii) the release of Mr. R. A. Bianco from all further funding obligations under the LFA, and (iii) a modification of the relative distribution between Mr. R. A. Bianco and the Company of any Litigation Proceeds received by the Company from the 111 West 57 th The Amendment provides that, in the event that the Company receives any Litigation Proceeds from the 111 West 57 th (i) first, 100% to the Company in an amount equal to the lesser of (a) the amount of actual litigation expenses incurred by the Company with respect to the Company’s 111 West 57 th (ii) thereafter, any additional amounts shall be distributed (a) 75% to the Company and (b) 25% to the Mr. R. A. Bianco (a reduction of Mr. R.A. Bianco’s percentage, which under the terms of the original LFA prior to the Amendment would have been 30% to 45% based on the length of time of any recovery). |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 - Subsequent Events The Company has performed a review of events subsequent to the balance sheet dated June 30, 2019, through the report issuance date. The Company has events and transactions, subsequent to June 30, 2019, and through the date these condensed consolidated financial statements were issued, as further discussed herein. |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
The Company and Basis of Presentation [Abstract] | |
Basis of Presentation | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that it deems reasonable, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
New Accounting Pronouncements | New accounting pronouncements There are no new accounting pronouncements, except as noted below, that would likely materially affect the Company’s condensed consolidated financial statements. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), “Leases,” which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedient and elected the following accounting policy related to this standard update: - Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less. Adoption of this standard did not result in any operating lease right-of-use assets and corresponding lease liabilities as all Company leases meet the definition of short-term leases. The standard did not materially impact operating results or liquidity. |
Real Estate Sold (Tables)
Real Estate Sold (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate Sold [Abstract] | |
Information Relating to Sale of Real Estate Owned | Information relating to the sale of the Company’s real estate owned in Greenwich, Connecticut is as follows: (in thousands) Amounts Gross sales price $ 5,200 Less: Transactions costs (290 ) Net cash proceeds 4,910 Less: Real estate carrying value, (net of accumulated depreciation) (1,632 ) Net gain on sale of real estate $ 3,278 |
Investment in 111 West 57th P_2
Investment in 111 West 57th Partners LLC (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investment in 111 West 57th Partners LLC [Abstract] | |
Initial Investment and Other Information Relating to the 111 West 57th Property | Amounts relating to the Company’s initial June 2013 investment and other information relating to the 111 West 57 th ($ in thousands) Company’s aggregate initial investment $ 57,250 Company’s aggregate initial membership interest % 60.3 % Other members and Sponsor initial investment $ 37,750 Approximate gross square feet of project 346,000 |
Information Relating to Financing for 111 West 57th Partners | Information relating to the June 30, 2015 financing for 111 West 57 th (in thousands) Financing obtained by 111 West 57 th $ 400,000 Financing obtained by 111 West 57 th $ 325,000 Annaly CRE LLC initial mortgage and acquisition loan repaid $ 230,000 |
Savings Plan (Tables)
Savings Plan (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Savings Plan [Abstract] | |
Matching Contributions to Savings Plan | The Company’s matching contributions to the Savings Plan, charged to expense, were as follows: ($ in thousands Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Company matching contributions $ 12 $ 3 $ 25 $ 28 Employer match % 33 % 33 % 33 % 33 % |
Common Stock Repurchase Plan (T
Common Stock Repurchase Plan (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Common Stock Repurchase Plan [Abstract] | |
Information Relating to Repurchase Plan | Information relating to the Repurchase Plan is as follows: (in thousands Six months ended June 30, 2019 Common shares repurchased to treasury during period - Aggregate cost of shares repurchased during period $ - (in thousands) June 30, 2019 Total number of common shares authorized for repurchase 10,000 Total number of common shares repurchased to date 6,226 Total number of shares that may yet be repurchased 3,774 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Operating Loss Carryforwards [Line Items] | |
Alternate Minimum Tax Credit Carryforwards | AMT credit carryforwards available, which can be used to offset income generated in future years which are not subject to expiration, are as follows : Amount AMT Credits carryforwards $ 10,741,000 |
Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year | The Company’s AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year are as follows: Tax Year (a) Declining balance of the AMT credit carryforward amount(s) available for each tax year (a)(b) % of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year (a)(b) 2019 $ 10,741,000 50 % $ 5,371,000 2020 5,371,000 50 % 2,685,000 2021 2,685,000 100 % 2,685,000 $ 10,741,000 (a) Assumes no regular federal income tax liability in tax years presented above which would reduce any AMT credit carryforward amount(s) ultimately refunded. (b) See herein with regard to the filing of the Company’s 2018 federal income tax return and the March 2019 federal tax refund received. |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss Carryforwards | The federal NOL carryforwards as of December 31, 2018, are as follows: Tax Year Originating Tax Year Expiring Amount 2006 2026 $ 500,000 2007 2027 12,700,000 2008 2028 4,600,000 2009 2029 2,400,000 2010 2030 1,900,000 2011 2031 1,900,000 2013 2033 3,700,000 2014 2034 4,900,000 2015 2035 4,200,000 2016 2036 3,400,000 2017 2037 68,000,000 2018 - 500,000 $ 108,700,000 |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss Carryforwards | The state NOL carryforwards as of December 31, 2018, are as follows: Tax Year Originating Tax Year Expiring Amount 2011 2031 $ 1,800,000 2013 2033 2,700,000 2014 2034 4,200,000 2015 2035 4,100,000 2016 2036 2,800,000 2017 2037 68,000,000 2018 2038 500,000 $ 84,100,000 |
The Company and Basis of Pres_3
The Company and Basis of Presentation (Details) | 1 Months Ended |
Apr. 30, 2019USD ($) | |
The Company and Basis of Presentation [Abstract] | |
Compensation bonus paid to employees | $ 1,356,000 |
Real Estate Sold (Details)
Real Estate Sold (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Information Relating to Sale of Real Estate Owned [Abstract] | ||||
Net gain on sale of real estate | $ 0 | $ 0 | $ 0 | $ 3,278 |
R. A. Bianco [Member] | Line of Credit [Member] | ||||
Information regarding accrued interest expense on the loan payable [Abstract] | ||||
Repayment of working capital loan plus accrued interest | 2,623 | |||
Commercial Office Building [Member] | ||||
Information Relating to Sale of Real Estate Owned [Abstract] | ||||
Gross sales price | 5,200 | |||
Less: Transactions costs | (290) | |||
Net cash proceeds | 4,910 | |||
Less: Real estate carrying value, (net of accumulated depreciation) | $ (1,632) | (1,632) | ||
Net gain on sale of real estate | $ 3,278 |
Investment in 111 West 57th P_3
Investment in 111 West 57th Partners LLC (Details) - Investment in 111 West 57th Partners LLC [Member] $ in Thousands | Jun. 28, 2013USD ($)ft² |
Initial Investment and Other Information Relating to the 111 West 57th Property [Abstract] | |
Company's aggregate initial investment | $ 57,250 |
Company's aggregate initial membership interest % | 60.30% |
Other members and Sponsor initial investment | $ 37,750 |
Approximate gross square feet of project | ft² | 346,000 |
Investment in 111 West 57th P_4
Investment in 111 West 57th Partners LLC, Additional Information Regarding Equity Investment in 111 West 57th Property (Details) $ in Thousands | Jun. 30, 2015USD ($) | Mar. 31, 2014 | Jun. 30, 2019USD ($) | Mar. 31, 2017USD ($) |
Additional Information Regarding Equity Investment in 111 West 57th Property [Abstract] | ||||
Description of partnership agreement distribution | The JV Agreement and related operating agreements generally provide that all distributable cash shall be distributed as follows: (i) first, 100% to the members in proportion to their percentage interests until Investment LLC has received distributions yielding a 20% internal rate of return as calculated; (ii) second, 100% to the Sponsor as a return of (but not a return on) any additional capital contributions made by the Sponsor on account of manager overruns; and (iii) thereafter, (a) 50% to the members in proportion to their respective percentage interests at the time of such distribution, and (b) 50% to the Sponsor. | |||
Subordinated participation interest to CEO | 10.00% | |||
Percentage of distribution on company's initial investment to be received prior to CEO receiving percentage distribution | 150.00% | |||
Valuation of shortfall capital contribution as multiple of amount actually contributed | 1.5 | |||
Sponsor calculation of investment LLC aggregate investment percentage after dilution | 48.00% | |||
Information Relating to Financing for Investment Property [Abstract] | ||||
Annaly CRE LLC initial mortgage and acquisition loan repaid | $ 230,000 | |||
Line of Credit [Member] | R. A. Bianco [Member] | ||||
Information Relating to Financing for Investment Property [Abstract] | ||||
Maximum borrowing capacity | $ 10,000 | |||
Minimum [Member] | ||||
Information Relating to Financing for Investment Property [Abstract] | ||||
Additional borrowing required to complete project | $ 60,000 | |||
Maximum [Member] | ||||
Information Relating to Financing for Investment Property [Abstract] | ||||
Additional borrowing required to complete project | $ 100,000 | |||
Capital LLC [Member] | ||||
Additional Information Regarding Equity Investment in 111 West 57th Property [Abstract] | ||||
Percentage of outstanding shares to be owned by CEO | 20.00% | |||
Investment LLC [Member] | Capital LLC [Member] | ||||
Additional Information Regarding Equity Investment in 111 West 57th Property [Abstract] | ||||
Terms of distributions to Capital LLC | available cash of Investment LLC will be distributed first to Capital LLC until it has received a 20% internal rate of return (calculated as provided for in the JV Agreement as noted above), second to the Company until it has received 150% of its capital, and, thereafter, available cash is split 10/90, with 10% going to Mr. R. A. Bianco as the subordinated participation interest noted above and 90% going to Capital LLC and the Company pari-passu, with Capital LLC receiving one-half of its pro-rata share based on capital contributed and the Company receiving the balance. | |||
AIG [Member] | ||||
Additional Information Regarding Equity Investment in 111 West 57th Property [Abstract] | ||||
Term of loan | 4 years | |||
Extension option of loan | 1 year | |||
Information Relating to Financing for Investment Property [Abstract] | ||||
Financing obtained by 111 W 57th Partners | 400,000 | |||
Apollo [Member] | ||||
Information Relating to Financing for Investment Property [Abstract] | ||||
Financing obtained by 111 W 57th Partners | $ 325,000 |
Savings Plan (Details)
Savings Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Savings Plan [Abstract] | ||||
Company matching contributions | $ 12 | $ 3 | $ 25 | $ 28 |
Employer match % | 33.00% | 33.00% | 33.00% | 33.00% |
Common Stock Repurchase Plan (D
Common Stock Repurchase Plan (Details) shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)shares | |
Common Stock Repurchase Plan [Abstract] | |
Common shares repurchased to treasury during period (in shares) | 0 |
Aggregate cost of shares repurchased during period | $ | $ 0 |
Total number of common shares authorized for repurchase (in shares) | 10,000 |
Total number of common shares repurchased to date (in shares) | 6,226 |
Total number of shares that may yet be repurchased (in shares) | 3,774 |
Income Taxes, Federal and State
Income Taxes, Federal and State NOL Carryforwards (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Income Tax Expense (Benefit) [Abstract] | ||||||
Income tax expense (benefit) | $ 1,000 | $ 2,000 | $ (29,000) | $ 4,000 | ||
Federal [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Operating loss carryforwards, amount | $ 108,700,000 | |||||
Federal [Member] | Tax Year 2006 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2006 | |||||
Tax year expiring | 2026 | |||||
Operating loss carryforwards, amount | 500,000 | |||||
Federal [Member] | Tax Year 2007 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2007 | |||||
Tax year expiring | 2027 | |||||
Operating loss carryforwards, amount | 12,700,000 | |||||
Federal [Member] | Tax Year 2008 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2008 | |||||
Tax year expiring | 2028 | |||||
Operating loss carryforwards, amount | 4,600,000 | |||||
Federal [Member] | Tax Year 2009 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2009 | |||||
Tax year expiring | 2029 | |||||
Operating loss carryforwards, amount | 2,400,000 | |||||
Federal [Member] | Tax Year 2010 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2010 | |||||
Tax year expiring | 2030 | |||||
Operating loss carryforwards, amount | 1,900,000 | |||||
Federal [Member] | Tax Year 2011 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2011 | |||||
Tax year expiring | 2031 | |||||
Operating loss carryforwards, amount | 1,900,000 | |||||
Federal [Member] | Tax Year 2013 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2013 | |||||
Tax year expiring | 2033 | |||||
Operating loss carryforwards, amount | 3,700,000 | |||||
Federal [Member] | Tax Year 2014 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2014 | |||||
Tax year expiring | 2034 | |||||
Operating loss carryforwards, amount | 4,900,000 | |||||
Federal [Member] | Tax Year 2015 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2015 | |||||
Tax year expiring | 2035 | |||||
Operating loss carryforwards, amount | 4,200,000 | |||||
Federal [Member] | Tax Year 2016 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2016 | |||||
Tax year expiring | 2036 | |||||
Operating loss carryforwards, amount | 3,400,000 | |||||
Federal [Member] | Tax Year 2017 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2017 | |||||
Tax year expiring | 2037 | |||||
Operating loss carryforwards, amount | 68,000,000 | |||||
Federal [Member] | Tax Year 2018 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2018 | |||||
Tax year expiring | ||||||
Operating loss carryforwards, amount | 500,000 | |||||
State [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Operating loss carryforwards, amount | 84,100,000 | |||||
State [Member] | Tax Year 2011 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2011 | |||||
Tax year expiring | 2031 | |||||
Operating loss carryforwards, amount | 1,800,000 | |||||
State [Member] | Tax Year 2013 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2013 | |||||
Tax year expiring | 2033 | |||||
Operating loss carryforwards, amount | 2,700,000 | |||||
State [Member] | Tax Year 2014 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2014 | |||||
Tax year expiring | 2034 | |||||
Operating loss carryforwards, amount | 4,200,000 | |||||
State [Member] | Tax Year 2015 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2015 | |||||
Tax year expiring | 2035 | |||||
Operating loss carryforwards, amount | 4,100,000 | |||||
State [Member] | Tax Year 2016 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2016 | |||||
Tax year expiring | 2036 | |||||
Operating loss carryforwards, amount | 2,800,000 | |||||
State [Member] | Tax Year 2017 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2017 | |||||
Tax year expiring | 2037 | |||||
Operating loss carryforwards, amount | 68,000,000 | |||||
State [Member] | Tax Year 2018 [Member] | ||||||
NOL Carryforwards [Abstract] | ||||||
Tax year originating | 2018 | |||||
Tax year expiring | 2038 | |||||
Operating loss carryforwards, amount | $ 500,000 | |||||
Alternative Minimum Tax (AMT) Credit Carryforward [Member] | ||||||
Income Tax Expense (Benefit) [Abstract] | ||||||
Income tax refund received | $ 30,000 |
Income Taxes, AMT Credits Carry
Income Taxes, AMT Credits Carryforwards (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2013 | Jun. 30, 2019 | Jun. 30, 2018 | Jul. 31, 2019 | ||
AMT Credit Carryforwards Available [Abstract] | ||||||
AMT Credits carryforwards | $ 10,741,000 | |||||
Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year [Abstract] | ||||||
Income taxes refunded (paid) | $ 10,700,000 | 10,742,000 | $ (5,000) | |||
Paid federal income taxes attributable to alternative minimum tax rate | $ 501,000 | |||||
Subsequent Event [Member] | ||||||
Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year [Abstract] | ||||||
Amount the FDIC is claiming to be reimbursed for the 2012 AMT Amount | $ 501,000 | |||||
Alternative Minimum Tax (AMT) Credit Carryforward [Member] | ||||||
Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year [Abstract] | ||||||
AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year | [1],[2] | 10,741,000 | ||||
Alternative Minimum Tax (AMT) Credit Carryforward [Member] | Tax Year 2019 [Member] | ||||||
Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year [Abstract] | ||||||
Declining balance of the AMT credit carryforward amount(s) available for each tax year | [1],[2] | $ 10,741,000 | ||||
% of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year | 50.00% | |||||
AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year | [1],[2] | $ 5,371,000 | ||||
Alternative Minimum Tax (AMT) Credit Carryforward [Member] | Tax Year 2020 [Member] | ||||||
Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year [Abstract] | ||||||
Declining balance of the AMT credit carryforward amount(s) available for each tax year | [1],[2] | $ 5,371,000 | ||||
% of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year | 50.00% | |||||
AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year | [1],[2] | $ 2,685,000 | ||||
Alternative Minimum Tax (AMT) Credit Carryforward [Member] | Tax Year 2021 [Member] | ||||||
Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year [Abstract] | ||||||
Declining balance of the AMT credit carryforward amount(s) available for each tax year | [1],[2] | $ 2,685,000 | ||||
% of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year | 100.00% | |||||
AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year | [1],[2] | $ 2,685,000 | ||||
[1] | Assumes no regular federal income tax liability in tax years presented above which would reduce any AMT credit carryforward amount(s) ultimately refunded. | |||||
[2] | See herein with regard the filing of the Company's 2018 federal income tax return and the March 2019 federal tax refund received. |
Litigation Funding Agreement (D
Litigation Funding Agreement (Details) - USD ($) | May 20, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2017 |
Litigation Funding Commitment [Abstract] | ||||
Repayment of litigation funding agreement | $ 3,672,000 | $ 0 | ||
Amendment [Member] | ||||
Litigation Funding Commitment [Abstract] | ||||
Maximum amount of litigation proceeds to be distributed to the Company | $ 7,500,000 | |||
Percentage of distribution ratio | 75.00% | |||
Amendment [Member] | Maximum [Member] | ||||
Litigation Funding Commitment [Abstract] | ||||
Percentage of distribution ratio up to maximum amount to the Company | 100.00% | |||
R. A. Bianco [Member] | ||||
Litigation Funding Commitment [Abstract] | ||||
Litigation fund | $ 7,000,000 | |||
Repayment of litigation funding agreement | $ 3,672,000 | |||
R. A. Bianco [Member] | Amendment [Member] | ||||
Litigation Funding Commitment [Abstract] | ||||
Percentage of distribution ratio | 25.00% | |||
R. A. Bianco [Member] | Original LFA [Member] | Minimum [Member] | ||||
Litigation Funding Commitment [Abstract] | ||||
Percentage of distribution ratio | 30.00% | |||
R. A. Bianco [Member] | Original LFA [Member] | Maximum [Member] | ||||
Litigation Funding Commitment [Abstract] | ||||
Percentage of distribution ratio | 45.00% |