• Filing Date: 2020-10-15
  • Form Type: 10-Q
  • Description: Quarterly report
v3.20.2
7. RELATED PARTY TRANSACTIONS
3 Months Ended
Aug. 31, 2020
Related Party Transactions [Abstract]  
7. RELATED PARTY TRANSACTIONS

Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Disclosures (“FASB ASC 850”) requires that transactions with related parties that would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance. Related party transactions typically occur within the context of the following relationships:

 

  Affiliates of the entity;

 

  Entities for which investments in their equity securities is typically accounted for under the equity method by the investing entity;

 

  Trusts for the benefit of employees;

 

  Principal owners of the entity and members of their immediate families;

 

  Management of the entity and members of their immediate families.

 

  Other parties that can significantly influence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

SORC and Alleghany are considered related parties under FASB ASC 850. All management fee revenue reported by the Company for the three months ended August 31, 2020 and 2019 is generated from charges to SORC. All outstanding notes payable at August 31, 2020 and May 31, 2020 are held by Alleghany Capital Corporation (“Alleghany Capital”), a wholly owned subsidiary of Alleghany. See Note 8.