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REIT asset and the interest generated by such a loan as qualifying income for purposes of the REIT income tests, and if such a challenge were sustained, we could fail to qualify as a REIT.

There may be uncertainties relating to the estimate of our Special Distribution, which could result in our failing to qualify as a REIT.

In order to qualify as a REIT for our taxable year ending December 31, 2010, we will be required to distribute to our stockholders all of our accumulated non-REIT tax earnings and profits, or E&P, prior to the end of such taxable year. Failure to make the Special Distribution before December 31, 2010 would result in our disqualification as a REIT. The determination of the amount to be distributed in the Special Distribution is a complex factual and legal determination. We may have less than complete information at the time we undertake our analysis or may interpret the applicable law differently than the IRS. We currently believe and intend that our Special Distribution will equal the amount required to be distributed in order to satisfy the requirements relating to the distribution of E&P. There are, however, uncertainties relating to the determination of our Special Distribution, including the possibility that the IRS could successfully assert that our taxable income should be increased, which would increase our E&P. Thus, we might fail to satisfy the requirement that we distribute all of our E&P by the close of our first taxable year as a REIT. Moreover, although there are procedures available to cure a failure to distribute all of our E&P, we cannot now determine whether we will be able to take advantage of them or the economic impact on us of doing them.

We could have potential deferred tax liabilities, which could delay or impede future sales of certain of our properties.

Under the Treasury Regulations, if, during the ten-year period beginning on the first day of the first taxable year for which we qualify as a REIT, which is expected to be January 1, 2010, we recognize gain on the disposition of any property that we held as of that date, then, to the extent of the excess of (i) the fair market value of such property as of that date over (ii) our adjusted income tax basis in such property as of that date, we will be required to pay a corporate level U.S. federal income tax on this gain at the highest regular corporate tax rate. Depending on the timing of our investments and the amount of any appreciation of such investments prior to January 1, 2010, there can be no assurance that a disposition triggering such gain will not occur and, if applicable, these Treasury Regulations could limit, delay or impede sales of our properties acquired prior to January 1, 2010.

Your investment has various tax risks.

Although the provisions of the Code generally relevant to an investment in our shares of common stock are described in “U.S. Federal Income Tax Considerations,” we urge you to consult your tax advisor concerning the effects of U.S. federal, state, local and foreign tax laws to you with regard to an investment in our shares of common stock.

Risk Related to the Transactions Contemplated by the Framework Agreement and Our Securities Following the Transactions Contemplated by the Framework Agreement

The Framework Transactions do not involve the acquisition by us of one or more operating businesses or assets and we are not furnishing audited historical financial statements of any target assets or business which has the effect of increasing the uncertainty, and thus the risk, of owning shares of our common stock.

The Framework Transactions do not involve the acquisition by us of one or more operating businesses or assets through a merger, capital stock exchange, stock purchase, asset acquisition or other similar business combination. In addition, we stated in our IPO prospectus that in connection with seeking stockholder approval of an initial business combination, we would furnish our stockholders with proxy materials that would include audited historical financial statements of the target business. Because we have not yet identified specific real properties for purchase, we are not

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including in this proxy statement audited financial statements relating to any of our target assets. As a result, you will not be able to evaluate the financial condition of any assets or operating businesses based on audited financial information prior to making your voting decision on any of the proposals set forth in this proxy statement. In addition, we have not yet identified any specific real estate investments for our proposed business following the completion of the Framework Transactions and, therefore, you will be unable to evaluate the allocation of the funds in our trust account or the economic merits of our investments prior to making a voting decision on any of the proposals set forth in this proxy statement. In addition, we may use the funds from our trust account to make investments with which you may not agree. These factors will increase the uncertainty, and thus the risk, of owning shares of our common stock. The failure of our management to apply the funds in our trust account to effectively or find suitable investments in a timely manner or on acceptable terms could result in returns that are substantially below expectations or result in losses, which could have a material adverse effect on our business, financial condition, results of operations and our ability to make distributions to our stockholders.

If we are unable to effect a business combination and are forced to liquidate, our warrants will expire worthless.

If we do not complete an initial “Business Combination” (as then defined in our charter) by October 23, 2009, our charter provides that our corporate existence will automatically terminate and we will distribute to all holders of shares of our common stock, in proportion to the number of shares of our common stock held by them, an aggregate sum equal to the amount in the trust account, inclusive of any interest, plus any remaining net assets. In such event, there will be no distribution with respect to our outstanding warrants. Accordingly, the warrants will expire worthless.

NRDC Capital Management and each of our executive officers are liable to ensure that proceeds of the trust account are not reduced by vendor claims in the event the transactions contemplated by the Framework Agreement are not consummated. Such liability may have influenced their decision to approve such transactions.

If we liquidate the trust account, NRDC Capital Management and each of our executive officers has agreed that they will be personally liable on a joint and several basis to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us. Neither we nor NRDC Capital Management or any of our executive officers has any reason to believe that NRDC Capital Management or any of our executive officers will not be able to fulfill their indemnity obligations to us if required to do so.

Additionally, if we are required to be liquidated and there are no funds remaining to pay the costs associated with the implementation and completion of such liquidation, NRDC Capital Management has agreed to advance us the funds necessary to pay such costs and complete such liquidation (currently anticipated to be between $15,000 and $25,000) and not to seek repayment for such expenses. If we consummate the transactions contemplated by the Framework Agreement, NRDC Capital Management or any of our executive officers will no longer be responsible for such expenses.

These personal obligations may have influenced our executive officers’ decision to approve the transactions contemplated by the Framework Agreement. In considering the recommendations of our board of directors to vote for the proposals, you should consider these interests.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them.

Our charter provides that we will continue in existence only until October 23, 2009. If we have not completed a “Business Combination” by such date and amended this provision in connection thereto, pursuant to the Delaware General Corporation Law (“DGCL”), our corporate existence will cease except for the purposes of winding up our affairs and liquidating. Under Sections 280 through 282 of the DGCL, stockholders may be held liable for claims by third parties against a corporation

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•				You Can Attend the Special Meetings and Vote in Person. We will give you a ballot when you arrive. However, if your shares or warrants are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or nominee has not already voted your shares or warrants.

Revoking Your Proxy

If you provide a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

•				you may send another proxy card with a later date;
•				you may notify Robert Baker, our secretary, in writing before the special meetings that you have revoked your proxy; or
•				you may attend the special meetings, revoke your proxy, and vote in person, as indicated above.

Who Can Answer Your Questions About Voting Your Shares or Warrants

If you have any questions about how to vote or direct a vote in respect of your shares of our common stock or warrants, you may call Morrow & Co., LLC, our proxy solicitor, toll-free at (800) 607-0088, or our employee Joseph Roos at (914) 272-8066.

Proxy Solicitation Costs

NRDC Acquisition is soliciting proxies on behalf of our board of directors. All solicitation costs will be paid by us. This solicitation is being made by mail but also may be made by telephone or in person. We and our directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means, including email and facsimile.

We have hired Morrow & Co., LLC to assist in the proxy solicitation process. We will pay that firm a fee of $37,500, including disbursements.

We will ask banks, brokers and other institutions, nominees and fiduciaries to forward our proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. We will reimburse them for their reasonable expenses.

Voting Commitments; Securities of the Founder Stockholders

As of September 24, 2009, the record date for the special meetings, the Founder Stockholders owned and were entitled to vote 10,350,000 Founders’ Shares. We and BofA entered into agreements with each of the Founder Stockholders pursuant to which each Founder Stockholder agreed to vote all of his, her or its:

•				Founders’ Shares in accordance with the majority of the votes cast by IPO Shares with respect to the Framework Transactions Sub-Proposal 1;
•				shares of our common stock (Founders’ Shares and IPO Shares) in favor of the Framework Transactions Sub-Proposal 2; and
•				IPO Shares in favor of the Framework Transactions Sub-Proposal 1. As a result, a Founder Stockholder who acquires shares in the secondary market must vote those shares in favor of the Framework Transactions Sub-Proposal 1 with respect to those shares, and will therefore not be eligible to exercise conversion rights for those shares if the Framework Transactions Sub-Proposal 1 is approved as required by our charter.

The Founder Stockholders have informed us that they intend to vote all their shares and warrants in favor of all the other proposals (including all related sub-proposals) that will be presented at the special meetings of our stockholders and warrantholders.

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THE INITIAL CHARTER PROPOSAL

General

We are proposing to amend our charter to revise the definition of a “Business Combination.” If the Initial Charter Proposal is approved by our stockholders, the definition of “Business Combination” will be amended to also include the consummation of substantially all of the transactions contemplated by the Framework Agreement.

Reasons for the Initial Charter Proposal; Effects

In the prospectus included in the registration statement for our IPO, we undertook to consummate an initial “Business Combination” (as defined in our current charter) in which we would acquire one or more assets or control of one or more operating businesses, through a merger, capital stock exchange, stock purchase, asset acquisition or other similar business combination having, collectively, a fair market value of at least 80% of the amount in our trust account (as determined in accordance with the requirements of our charter) at the time of such acquisition by October 23, 2009 or liquidate. These requirements were set forth in our charter. In the transactions set forth in the Framework Agreement, we are not acquiring one or more assets or control of one or more operating businesses. Instead, the Framework Agreement sets forth the steps we will take to continue our business as a corporation that will qualify as a REIT, commencing with our taxable year ending December 31, 2010. In addition, we stated in our IPO prospectus that in connection with seeking stockholder approval of an initial business combination, we would furnish our stockholders with proxy materials that would include audited historical financial statements of the target business. Because we have not yet identified specific real properties for purchase, we are not including in this proxy statement audited financial statements relating to any of our target assets. Accordingly, the proposed transactions contemplated by the Framework Agreement do not satisfy the above requirements as originally contemplated by our IPO prospectus. However, we considered and analyzed numerous companies and acquisition opportunities in our search for an attractive business combination candidate, none of which were believed to be as attractive to public stockholders as continuing our business as a corporation that will elect to qualify as a REIT, commencing with our taxable year ending December 31, 2010.

Our current charter requires that we can only complete a business combination involving an acquisition of real property assets or one or more operating businesses if the fair market value of such assets or business is at least equal to 80% of the balance in the trust account (less the deferred underwriting discounts and commissions and taxes payable) at the time of such combination. The fair market value of such assets or business will be determined by our board of directors based upon standards generally accepted by the financial community, such as actual and potential sales, earnings, cash flow and book value. Our current charter provides that if our board of directors is not able to independently determine that the target assets or business has a sufficient fair market value to meet the threshold criterion, we would have to obtain an opinion from an unaffiliated, independent investment banking firm which is a member of the Financial Industry Regulatory Authority (FINRA) with respect to the fair market value of the target business. We do not believe that such circumstances under which our charter requires us to obtain a fairness opinion are applicable to the transactions contemplated by the Framework Agreement. We also stated in our IPO prospectus, because we had agreed to do so in the underwriting agreement we entered into with the underwriters in our IPO, that we would obtain a fairness opinion if one of our executive officers, directors or existing stockholders is affiliated with the target business. We have since amended the underwriting agreement to remove this provision. The absence of the acquisition of an existing business or assets also precluded the use of customary analyses on which fairness opinions are typically based.

In considering the Initial Charter Proposal, our board of directors came to the conclusion that the potential benefits to NRDC Acquisition and our stockholders of the transactions contemplated by the Framework Agreement outweighed the possibility of any liability described below as a result of the Initial Charter Proposal being approved. The ownership percentage of our stockholders who do not exercise their conversion rights will increase as a result of the cancellation of certain of the

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discussions with the management of the target, as well as internally generated estimates of recovery on assets, and the potential degradation of the book value of the target. As the result of this due diligence, we concluded that the deteriorating value of the legacy assets of the target had a high probability of reducing the book value of the target further than initially estimated. Moreover, our research on the capital markets environment and public shareholder sentiment for the acquisition of banks or existing legacy bank assets revealed that any acquisition of the target at a price acceptable to the seller would have a low probability of succeeding in the market. We retracted our offer in January 2009.

In December 2008, a global investment bank and a smaller sector specific investment bank, both advisors to us, introduced a publicly traded REIT to us. The target was seeking to recapitalize through merger as it was facing a maturity of a portion of its debt. We entered into a confidentiality agreement with the target, engaged the introducing investment bankers as our buy-side representatives and began to analyze specific confidential information about the target. In January 2009, we submitted a non-binding term sheet proposal to the target to purchase all of its capital stock for our stock. We held several meetings with management and performed extensive due diligence on the target. With the advice of its bankers, we designed a recapitalized business plan for the target, which would include the ability of the target to avail itself of our capital to reduce debt and purchase new properties in a dislocated real estate market. We had several follow-on discussions with the management of the target and made a formal presentation to the board of the target in late March 2009. The board of the target, advised by its own investment bank, rejected the proposal and instead decided to seek liquidity through other means. The target remains unsold, though it has extended the maturity of some of its debt.

In January 2009, we began to investigate the concept of becoming a bank, REIT or mortgage REIT by ourselves in a transaction that would not comply with the definition of “Business Combination” set forth in our charter and described in our IPO prospectus, because as asset prices in these sectors continued to decline, research evidenced that a new company without the encumbrance of legacy assets could be more attractive to the market. That month, we signed a confidentiality agreement with a publicly traded loan servicing company to investigate the transfer of assets to us for cash and stock. Beginning in February 2009, several non-binding proposals were exchanged and discussed between us and the target, including the creation of a new loan servicing company that would also purchase loans and real estate securities from banks and other institutions that desired to sell them. No final agreement was ever reached, however, and we ceased negotiations in May 2009 because the parties could not agree on the economic terms of a transaction.

In February 2009, while in the middle of working on the immediately preceding prospective transaction, a sector specific investment bank introduced us to a team of mortgage REIT portfolio managers who were seeking capital and looking for a publicly traded platform. We signed a confidentiality agreement and began to review the performance history of the team and the mortgage asset class they managed. Several proposals were exchanged between us and the portfolio management team, as we, with the help of our financial advisors from the sector specific investment bank, sought to design a structure that would be priced competitively when compared to other publicly traded platforms that traded similar mortgages. However, a capital markets study revealed that, at the time, the other publicly traded competitors in that sector were trading at price levels that would have made it difficult to accommodate the desired economics of the portfolio management team and still be attractive to our stockholders. Negotiations ceased in April 2009.

In March 2009, a global investment bank introduced us to a very large, private multi-regional bank that was seeking capital or other strategic alternatives. The investment bank proposed a creative solution in which we would purchase a controlling portion of the target and become a bank holding company. We entered into a confidentiality agreement with the target in April 2009, and began to receive and review detailed information of the company, including its financial performance versus that of its competitors in various markets, its diversified businesses and product offerings, and its legacy loan portfolio. With the help of our financial advisors from the global investment bank, we designed a structure that would protect our stockholders from further deterioration in the book value of the target, while affording the target’s stockholders the opportunity to participate in the performance of the target going forward. We submitted a non-binding term sheet that involved us

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