12.   COMMITMENTS AND CONTINGENCIES

Newcastle is, from time to time, a defendant in legal actions from transactions conducted in the ordinary course of business. Management, after consultation with legal counsel, believes the ultimate liability arising from such actions, individually and in the aggregate, that existed at September 30, 2013, if any, will not materially affect Newcastle’s consolidated results of operations or financial position.

As discussed in Note 2, in connection with the GateHouse restructuring , we (or our designated affiliates or other designees) have offered to purchase the debt of GateHouse’s other creditors in cash at 40% of par (the “Cash-Out Option”).  Pursuant to the restructuring, reorganized GateHouse will be contributed to New Media, which is currently a wholly owned subsidiary of Newcastle, and GateHouse will use commercially reasonable efforts to raise a new debt facility in an amount of up to $150.0 million. The creditors have the right to elect to receive (i) the Cash-Out Option and/or (ii) common stock of New Media and the net cash proceeds, if any, of the new debt facility (the “Equity Option”). We and certain other creditors have elected the Equity Option, and creditors with approximately $369.9 million in debt positions, including expected accrued interest through the effective date, have elected the Cash-Out Option. The restructuring is subject to approval by the U.S Bankruptcy Court.