This excerpt taken from the NCT 10-Q filed May 11, 2009.
8. COMMITMENTS AND CONTINGENCIES
Loan Commitment With respect to a commercial construction loan, Newcastle was committed to fund up to an additional $52.7 million at March 31, 2009 subject to certain conditions to be met by the borrowers, of which $13.2 million is to be funded by one of Newcastles CDOs.
LitigationNewcastle 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 which existed at March 31, 2009, if any, will not materially affect Newcastles consolidated results of operations or financial position.
Preferred Dividends in Arrears As of March 31, 2009, $5.6 million of dividends on Newcastles cumulative preferred stock were unpaid and in arrears.
Contingent Gain in CDOs Newcastle has recorded $2.4 billion of losses in its CDOs in excess of its economic exposure which must eventually be reversed through amortization, sales at gains, or as gains at the deconsolidation or termination of the CDOs.
Contingent Gain in Other Non-Recourse Financing Newcastle has recorded $20.5 million of losses in its manufactured housing loan portfolios in excess of its economic exposure which must eventually be reversed through amortization, sales at gains, or as gains at the extinguishment of debt.