|
COMMITMENTS AND CONTINGENCIES
|
3 Months Ended |
|---|---|
|
Mar. 31, 2012
|
|
| Commitments And Contingencies | |
| COMMITMENTS AND CONTINGENCIES |
8. COMMITMENTS AND CONTINGENCIES
Litigation 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 March 31, 2012, if any, will not materially affect Newcastle’s consolidated results of operations or financial position.
Contingent Gain in CDOs Newcastle cannot economically lose more than its investment amount in any given non-recourse financing structure. Therefore, impairment recorded in excess of such investment, which results in negative GAAP book value for a given non-recourse financing structure, cannot economically be incurred. For non-recourse financing structures with negative GAAP book value, the aggregate negative GAAP book value will eventually be recorded as an increase to GAAP book value. As of March 31, 2012, Newcastle has recorded $121.7 million of losses in its CDOs in excess of its economic exposure which must eventually be reversed through amortization, sales at gains, or as reductions to accumulated deficit at the deconsolidation or termination of the CDOs. |