Needham-based Realty Finance Corporation reported its final 2011 earnings today, ending the year barely in the black with $1.1 million in net income. The company had lost $126.6 million in 2010, $120 million of that on a pair of collateralized debt obligations.

Realty Finance reported $4.5 million in cash on hand, and $800,000 in outstanding debt. The firm again warned in its earnings report that while its current income was sufficient to maintain operations, it could make no promises about its future and did not believe it would ever recover any of its losses, which exceed the firm’s initial investment in the CDOs.

The firm had invested in the most junior bonds and equity in the CDOs, making it last in line for repayment should the value of the CDOs decline. With the debt outstanding for both instruments considerably in excess of their current market value, Realty Finance reports that it doesn’t expect any earnings from the bonds in future. Its current income is derived from management fees.  

The firm has been seeking new partners to resume operations, but legal entanglements had blocked that path. Some of those are now resolved, it reported. The class action suit begun against it in 2007 by disgruntled shareholders was dismissed in July 2011 and will not be appealed. It has also been awarded a $22.6 million judgment by the United States District Court for the District of Maryland in a suit it brought against two guarantors of two mezzanine loans for residential development projects in Maryland.  All appeals have been exhausted and the company is pursuing collection efforts, but it not certain how much, if any, of the judgment may be collected.

As of February 2011, the company’s chief financial officer and two other remaining employees resigned. Day-to-day corporate, finance, asset management and tax services to are being managed by Waldron H. Rand & Co.  Kenneth J. Witkin was appointed Treasurer of the company effective upon the CFO’s resignation.