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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549





FORM 10-Q







|þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2009

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from                      to

Commission
file number 001-11011





THE FINOVA GROUP INC.

(Exact name of
registrant as specified in its charter)







|                                                              |  |                                     
|------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                      |  | 86-0695381                          
|(State or other jurisdiction of incorporation ororganization) |  | (I.R.S. employer identification no.)



|                                                  |  |           
|------------------------------------------------- |  | ----------
|8320 North Hayden Road, Suite C112 Scottsdale, AZ |  | 85258     
|(Address of principal executive offices)          |  | (Zip code)

Registrants telephone number, including area code: 480-624-4988

N/A

(Former name, former address and
former fiscal year, if changed since last report)





Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files.)    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of large accelerated filer, accelerated filer
and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   ̈        Accelerated filer   ̈        Non-accelerated filer   ̈        Smaller reporting company  þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  þ

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PRECEDING FIVE YEARS:

Indicate by check
mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the
court.    Yes  þ    No   ̈

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of August 13, 2009, approximately 122,041,000 shares of Common Stock
($0.01 par value) were outstanding.









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THE FINOVA GROUP INC.

TABLE OF CONTENTS



|           |  |                                                                                                                                                            |  |         
|---------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|           |  |                                                                                                                                                            |  | Page No.
|           |  |                                                                                                                                                           
|           |  | PART I FINANCIAL INFORMATION                                                                                                                               |  |         
|           |  |                                                                                                                                                           
|Item 1.    |  | Financial Statements                                                                                                                                       |  |         
|           |  |                                                                                                                                                           
|           |  | Consolidated Statements of Net Assets in Liquidation (liquidation basis) at June 30, 2009 (unaudited) and December 31, 2008                                |  | 1       
|           |  |                                                                                                                                                           
|           |  | Consolidated Statements of Changes in Net Assets in Liquidation (liquidation basis) (unaudited) for the Three and Six Months
 Ended June 30, 2009 and 2008 |  | 2       
|           |  |                                                                                                                                                           
|           |  | Notes to Interim Condensed Consolidated Financial Statements (unaudited)                                                                                   |  | 3       
|           |  |                                                                                                                                                           
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                      |  | 11      
|           |  |                                                                                                                                                           
|           |  | Special Note Regarding Forward-Looking Statements                                                                                                          |  | 19      
|           |  |                                                                                                                                                           
|Item 4T.   |  | Controls and Procedures                                                                                                                                    |  | 19      
|           |  |                                                                                                                                                           
|           |  | PART II OTHER INFORMATION                                                                                                                                  |  |         
|           |  |                                                                                                                                                           
|Item 1.    |  | Legal Proceedings                                                                                                                                          |  | 20      
|           |  |                                                                                                                                                           
|Item 1A.   |  | Risk Factors                                                                                                                                               |  | 20      
|           |  |                                                                                                                                                           
|Item 6.    |  | Exhibits                                                                                                                                                   |  | 20      
|           | 
|Signatures |  | 21                                                                                                                                                        



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PART I FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

THE FINOVA GROUP INC.

CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION (LIQUIDATION BASIS)

(Dollars in thousands)



|                                                                                       |  |                          |         |                            |   |        
|-------------------------------------------------------------------------------------- |  | ------------------------ | ------- | -------------------------- | - | -------
|                                                                                       |  | June 30, 2009(Unaudited) |         | December 31, 2008(Audited)
|ASSETS                                                                                 |  |                          |         |                            |   |        
|Cash and cash equivalents                                                              |  | $                        | 63,074  |                            | $ | 65,914 
|Restricted cashimpermissible restricted payments                                      |  |                          | 81,228  |                            |   | 81,228 
|Liquidating portfolio                                                                  |  |                          | 2,077   |                            |   | 505    
|Other assets and deposits                                                              |  |                          | 649     |                            |   | 759    
|                                                                                       |  |                          |         |                            |   |        
|Total Assets                                                                           |  | $                        | 147,028 |                            | $ | 148,406
|                                                                                       |  |                          |         |                            |   |        
|                                                                                       |  |                         
|LIABILITIES (excluding Senior Notes)                                                   |  |                          |         |                            |   |        
|Interest payable on the Senior Notes                                                   |  | $                        | 67,566  |                            | $ | 13,648 
|Reserve for estimated costs during the liquidation period                              |  |                          | 5,294   |                            |   | 8,906  
|                                                                                       |  |                          |         |                            |   |        
|Total Liabilities (excluding Senior Notes)                                             |  |                          | 72,860  |                            |   | 22,554 
|                                                                                       |  |                          |         |                            |   |        
|                                                                                       |  |                         
|Net Assets Available for Settlement of Senior Notes                                    |  |                          | 74,168  |                            |   | 125,852
|                                                                                       |  |                         
|Senior Notes with outstanding principal of $1.4 billion at estimated settlement amount |  |                          | 74,168  |                            |   | 125,852
|                                                                                       |  |                          |         |                            |   |        
|Net Assets in Liquidation                                                              |  | $                        |        |                            | $ |       
|                                                                                       |  |                          |         |                            |   |        

See notes to interim condensed consolidated financial statements.



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THE FINOVA GROUP INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION (LIQUIDATION BASIS)

(Dollars in thousands)

(Unaudited)



|                                                                            |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                            |  | Three Months Ended June 30, |         |   | Six Months Ended June 30, |  
|                                                                            |  | 2009                        |         |   | 2008                      |   |         | 2009 |  |   | 2008    |  
|Net Assets in Liquidation, beginning of period                              |  | $                           |        |   |                           | $ |        |      |  | $ |        |   |  | $ |        |  
|                                                                            |  |                             |         |  
|Changes in net assets in liquidation:                                       |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Change in estimated net realizable value of assets and other liabilities    |  |                             | 5,423   |   |                           |   | 28      |      |  |   | 5,346   |   |  |   | 246     |  
|Interest earned on investment of cash reserves and other operating activity |  |                             | 101     |   |                           |   | 2,009   |      |  |   | 284     |   |  |   | 4,247   |  
|Change in estimated costs during the liquidation period                     |  |                             | (3,429  | ) |                           |   | (2,968  | )    |  |   | (3,396  | ) |  |   | (1,790  | )
|Interest accruing on the Senior Notes                                       |  |                             | (27,215 | ) |                           |   | (26,703 | )    |  |   | (53,918 | ) |  |   | (53,406 | )
|Reduction in the estimated settlement of the Senior Notes                   |  |                             | 25,120  |   |                           |   | 27,634  |      |  |   | 51,684  |   |  |   | 50,703  |  
|                                                                            |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net Change in Net Assets in Liquidation                                     |  | $                           |        |   |                           | $ |        |      |  | $ |        |   |  | $ |        |  
|                                                                            |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net Assets in Liquidation, end of period                                    |  | $                           |        |   |                           | $ |        |      |  | $ |        |   |  | $ |        |  
|                                                                            |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  

See notes to interim condensed consolidated financial statements.



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THE FINOVA GROUP INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009

(Dollars in thousands in tables)

(Unaudited)

A. Nature of Operations and Plan of
Liquidation

The accompanying financial statements and notes hereto should be read in conjunction with the consolidated financial statements and notes
thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2008 (the 2008 Form 10-K). Capitalized terms not defined herein are used as defined in the 2008 Form 10-K.

The notes to the financial statements relate to The FINOVA Group Inc. and its subsidiaries (collectively FINOVA or the Company), including FINOVA
Capital Corporation and its subsidiaries (FINOVA Capital). FINOVA was a financial services holding company. Through its principal operating subsidiary, FINOVA Capital, we provided a broad range of financing and capital markets products,
primarily to mid-size businesses. Throughout this document, we, us and our also refer to The FINOVA Group Inc. and its subsidiaries.

Since emergence from chapter 11 bankruptcy proceedings in August 2001, our business activities have been limited to maximizing the value of our portfolio through the orderly collection of our assets. These activities
included collection efforts pursuant to underlying contractual terms, negotiation of prepayments and sales of assets or collateral. We have substantially completed the liquidation of our portfolio and our focus has shifted to the continued wind down
of our operations and future dissolution of our entities. We are prohibited by the Indenture (the Indenture) governing our 7.5% Senior Secured Notes (the Senior Notes) from engaging in any new lending activities or other
business.

In accordance with the terms of the Indenture, we are required to use any excess cash, as defined in the Indenture, to make semi-annual interest
and principal payments on the Senior Notes. However, as previously disclosed, we will not make any future voluntary prepayments or the one remaining scheduled interest payment. Our remaining unrestricted cash is expected to be distributed in
conjunction with the final wind-up of our affairs and the future dissolution of the Company, which is currently expected to occur by the end of November 2009, although there can be no assurance that we will be successful in meeting that schedule.

Because substantially all of our assets (including cash reserves) are pledged to secure obligations under the promissory notes of FINOVA Capital issued to
us in the aggregate principal amount of the Senior Notes (the Intercompany Notes), our ability to obtain additional or alternate financing is severely restricted. As a result of this and the substantial liquidation of our portfolio, our
only meaningful source of liquidity is cash reserves held by the Company.

Plan of Liquidation

On November 1, 2006, our Board of Directors (the Board) approved the Plan of Complete Liquidation and Dissolution (the Plan of Liquidation)
and the filing of a motion (the Motion) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court). On December 4, 2006, the Bankruptcy Court granted our Motion and approved (i) the
previously announced settlement of various litigations associated with The Thaxton Group, Inc. (the Thaxton Settlement), (ii) the ongoing sale of our remaining assets, the orderly windup of our operations and our future dissolution,
(iii) our sale of all or substantially all of our assets without stockholder approval and our future dissolution without stockholder approval at such time as our Board deems to be appropriate and (iv) channeling to the Bankruptcy Court any
claims against us that the holders of our Senior Notes or the indenture trustee for the Senior Notes may have arising from or in any way related to our joint chapter 11 plan, the ongoing liquidation of FINOVA, the senior secured notes, or the windup
of our operations.

We have continued with efforts to wind-up our affairs; however, as previously disclosed we cannot control the timing of resolving legal
matters. Certain legal matters continue to take longer than anticipated to resolve, including the Thaxton Life Partners arbitration hearing, which occurred the week of August 10, 2009, and the motion regarding distributions to stockholders,
which has been scheduled for oral argument on October 2, 2009. Refer below to Note G. Litigation and Claims for a further discussion of our outstanding legal matters.



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Once the legal matters have been resolved, we believe we will still need a short period of time to complete the final
wind-up of our affairs. As a result, the reserve for estimated costs reflected in our Statement of Net Assets in Liquidation currently assumes a liquidation period through November of 2009. There can be no assurance we will complete our liquidation
in this time period, and the resolution of the various legal matters may extend for a longer period of time.

We are concerned about the continued delays
in the legal process, particularly in regards to the litigations referred to in Note G. Litigation and Claims below, and how such delays continue to deplete assets available to settle our liabilities. We have evaluated and continue to
consider alternatives to complete the wind-up process, including transferring to a liquidating trust any assets not sold or distributed (subject to outstanding liabilities), depending on the progress of the outstanding legal matters. We will
continue to evaluate our progress in resolving the outstanding legal matters and re-evaluate our reserve for estimated costs.

If there is a further delay
in the Thaxton Life Partners arbitration proceedings, it is possible that the matter may not be resolved prior to the maturity date of the Senior Notes, which is November 15, 2009. As previously disclosed, FINOVA does not have sufficient assets
to fully repay the amounts due under the Senior Notes. We are not able to predict what course of action, if any, the noteholders will pursue in these circumstances.

If the Thaxton Life Partners arbitration results in a favorable ruling prior to the maturity date of the Senior Notes, we plan on moving forward with the final dissolution of the Company, whether or not the motion
regarding distributions to stockholders has been resolved. Our intent is to complete the dissolution of the FINOVA entities under Delaware law and turn the restricted cash over to a liquidating trustee or other liquidation agent, pending resolution
of the motion regarding distributions to FINOVAs stockholders.

We will continue to operate as a public company during the liquidation under a
Management Services Agreement with Leucadia National Corporation (Leucadia) that expires in 2011. Pursuant to that agreement, Leucadia has designated its employees to act as Chairman of the Board (Ian M. Cumming), President (Joseph S.
Steinberg) and Chief Executive Officer (Thomas E. Mara).

B. Significant Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to use estimates and assumptions that affect reported
amounts of assets and liabilities. These estimates are subject to known and unknown risks, uncertainties and other factors that could materially impact the amounts reported and disclosed in the financial statements. Significant estimates include
anticipated amounts and timing of future cash flows used in the calculation of net realizable value, reserve for future costs and settlement amounts. Actual results could differ from those estimated.

Interim Reporting

The interim consolidated financial
statements have been prepared in accordance with U.S. generally accepted accounting principles. The interim consolidated financial information is unaudited. In the opinion of management, all adjustments consisting of normal recurring items necessary
to present fairly our net assets in liquidation as of June 30, 2009 and the changes in net assets presented herein have been included in our consolidated financial statements.

For a complete listing of our significant accounting policies, see Note B. Significant Accounting Policies in our 2008 Form 10-K. The policies related to the liquidation basis of accounting were the only
policies presented herein. With the adoption of the liquidation basis of accounting, all anticipated improvements or deterioration in the portfolio are fully reflected in our financial statements as facts and assumptions change.

Liquidation Basis of Accounting

As a result of the approval
of our Plan of Liquidation by the Bankruptcy Court, we took steps to initiate our complete liquidation and as such, the information provided in this Report on Form 10-Q reflects our adoption of the liquidation basis of accounting effective the close
of business on December 4, 2006 in accordance with accounting principles generally accepted in the United States. A Statement of Net Assets in Liquidation and a Statement of Changes in Net Assets in Liquidation are the principal financial
statements presented under the liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable value, which is the non-discounted amount of cash, or its equivalent, into which an asset
is expected to be converted in the



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due course of business less direct costs, while liabilities are reported at their estimated net settlement amount, which is the non-discounted amounts of
cash, or its equivalent, expected to be paid to liquidate an obligation in the due course of business, including direct costs. Additionally, under the liquidation basis of accounting, we are required to establish a reserve for all future estimated
general and administrative expenses and other costs expected to be incurred during the liquidation (exclusive of interest expense). These estimates will be periodically reviewed and adjusted as appropriate. There can be no assurance that these
estimated values will be realized. Such amounts should not be taken as an indication of the timing or amount of future distributions or our actual dissolution. The valuation of assets at their net realizable value and liabilities at their
anticipated settlement amount represent estimates, based on present facts and circumstances, of the net realizable value of the assets and the costs associated with carrying out the Plan of Liquidation based on the assumptions set forth below. The
actual values and costs associated with carrying out the Plan of Liquidation are expected to differ from amounts reflected in the accompanying financial statements because of the plans inherent uncertainty. These differences may be material.
In particular, the estimates of our costs will vary with the length of time necessary to complete the Plan of Liquidation. Accordingly, it is not possible to predict with certainty the timing or aggregate amount which will ultimately be distributed
to note holders and no assurance can be given that the distributions will equal or exceed the estimate presented in the accompanying Statements of Net Assets in Liquidation or the price at which our Senior Notes have traded or are expected to trade
in the future.

The following are the significant assumptions utilized by management in assessing the value of our liquidating portfolio and the expected
settlement amount of liabilities included in the Statements of Net Assets in Liquidation at June 30, 2009 and December 31, 2008.

Liquidating
Portfolio.The remaining liquidating portfolio is primarily comprised of judgments and claims against former customers and non-marketable private equity and other securities. All assets were adjusted to their estimated net realizable values,
which represented all future undiscounted cash flows expected to be collected from each of these transactions including sales and settlement proceeds, principal collections, scheduled rental payments and interest. Cash flow estimates for these
assets are based on current information obtained from trustees and others, collection efforts, customer collateral and the financial condition of these former customers. Changes in facts and assumptions have resulted in, and may in the future result
in, significant positive or negative changes to estimated cash flows and therefore, net realizable values.

Reserve for Estimated Costs during the
Liquidation Period.Under the liquidation basis of accounting, we are required to estimate and accrue for costs associated with implementing and completing the Plan of Liquidation. The reserve for estimated costs includes four primary areas of
accruals: people costs (payroll and benefits), Leucadia management fees, professional services and litigation costs and corporate expenses (insurance, directors fees and entity related expenses). Certain of these amounts can vary significantly
due to, among other things, the timing of asset sales, the timing and amounts associated with discharging known and contingent liabilities and claims, the costs associated with cessation of our operations and the costs of retaining knowledgeable
personnel and others to oversee the liquidation. As a result, we have accrued the projected costs including corporate overhead and specific liquidation costs of performance bonuses, professional fees and various other wind-up costs expected to be
incurred during the projected period to complete the liquidation and dissolution. These expense accruals will be periodically reviewed for adequacy and adjusted from time to time as projections and assumptions change. Changes to the accruals will be
recorded as adjustments to net assets in liquidation in future periods.

C. Changes in Net Assets in Liquidation

During the six months ended June 30, 2009, the estimated net realizable value of our assets and liabilities increased a net $5.3 million; while during the same
period of 2008, the estimated net realizable value increased $0.2 million. The increase during 2009 was primarily due to the full recovery of a claim plus interest against a former customer and a proposed settlement of another claim for slightly
less than the full amount of the claim and interest. In August 2009, the proposed settlement was finalized and we collected $2.0 million. Neither of these claims had been previously included in the estimated net realizable value of our assets due to
substantial doubt about their collection. The increase during 2008 was primarily attributed to higher than previously anticipated recoveries of cash amounts posted to secure potential obligations, partially offset by a decline in the value of
certain cash investments. Additionally, during the six months ended June 30, 2009 and 2008, we accrued $53.9 million and $53.4 million, respectively, of additional interest on the Senior Notes and earned interest income on cash investments and
other operating activity of $0.3 million and $4.2 million, respectively. Any cash received in excess of an individual assets estimated net realizable value is shown as a change in net assets in the period of collection.



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The net realizable value of our assets does not take into consideration all future interest to be earned on cash and cash
equivalents. Interest earned on the investment of cash reserves is shown separately as a change in net assets. As of June 30, 2009, our short-term investments are primarily comprised of lower risk money markets, including money markets backed
by U.S. Treasuries and other government sponsored securities. The aggregate yield we are currently receiving on our cash investments is not sufficient to fully offset the costs of the liquidation process.

Under the liquidation basis of accounting, we were also required to establish and maintain a reserve for all future general and administrative expenses and other costs
expected to be incurred during the liquidation (exclusive of interest expense). The following is a summary of and changes to the reserve for estimated costs for the six months ended June 30, 2009:



|                                                                |  |                  |       |                            |   |        |              |  |   |      
|--------------------------------------------------------------- |  | ---------------- | ----- | -------------------------- | - | ------ | ------------ |  | - | -----
|                                                                |  | December 31,2008 |       | NetAdjustmentsand Payments |   |        | June 30,2009
|People costs (payroll and benefits)                             |  | $                | 1,338 |                            | $ | (378   | )            |  | $ | 960  
|Leucadia management fees                                        |  |                  | 4,000 |                            |   | (2,000 | )            |  |   | 2,000
|Professional services and litigation costs                      |  |                  | 2,459 |                            |   | (369   | )            |  |   | 2,090
|General corporate expenses                                      |  |                  | 1,109 |                            |   | (865   | )            |  |   | 244  
|                                                                |  |                  |       |                            |   |        |              |  |   |      
|Total reserve for estimated costs during the liquidation period |  | $                | 8,906 |                            | $ | (3,612 | )            |  | $ | 5,294
|                                                                |  |                  |       |                            |   |        |              |  |   |      

During the six months ended June 30, 2009, the reserve declined by $3.6 million due to the payment of
expenses of $7.0 million, partially offset by a $3.4 million net increase in our estimate due to the extension of the estimated liquidation period through November of 2009.

We have continued with efforts to wind-up our affairs; however, as previously disclosed we cannot control the timing of resolving legal matters. Certain legal matters continue to take longer than anticipated to
resolve, including the Thaxton Life Partners arbitration hearing, which occurred the week of August 10, 2009, and the motion regarding distributions to stockholders, which has been scheduled for oral argument on October 2, 2009. Refer
below to Note G. Litigation and Claims for a further discussion of our outstanding legal matters.

Once the legal matters have been resolved,
we believe we will still need a short period of time to complete the final wind-up of our affairs. As a result, the reserve for estimated costs reflected in our Statement of Net Assets in Liquidation currently assumes a liquidation period through
November of 2009. There can be no assurance we will complete our liquidation in this time period, and the resolution of the various legal matters may extend for a longer period of time.

Due to the fact that we do not have sufficient assets to fully satisfy all obligations to our creditors, any change to the estimated net realizable value of our assets and liabilities results in a corresponding
adjustment to the estimated settlement amount of the Senior Notes. During the six months ended June 30, 2009, the estimated settlement amount of the Senior Notes (principal only) was reduced by $51.7 million to a balance of $74.2 million;
however, we currently estimate the Senior Note holders will receive total liquidation distributions (principal and interest) of approximately $141.7 million, which is a $2.2 million increase over our 2008 year-end estimate.

D. Liquidating Portfolio

Our liquidating portfolio is recorded at
its estimated net realizable value, which incorporates all future cash flows, including earnings expected to be collected.



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The following table presents the activity in our liquidating portfolio for the six months ended June 30, 2009:



|                                           |  |   |        |  
|------------------------------------------ |  | - | ------ | -
|Liquidating Portfolio at December 31, 2008 |  | $ | 505    |  
|Cash activity                              |  |   | (3,812 | )
|Non-cash activity                          |  |   | 5,384  |  
|                                           |  |   |        |  
|Liquidating Portfolio at June 30, 2009     |  | $ | 2,077  |  
|                                           |  |   |        |  

Our liquidating portfolio increased to $2.1 million at June 30, 2009. Cash activity for 2009 primarily
represented collections and proceeds received on judgments and claims against former customers, while the non-cash activity primarily represented an increase in the estimated net realizable value of certain assets due to the full recovery of a claim
plus interest against a former customer and a proposed settlement of another claim for slightly less than the full amount of the claim and interest. In August 2009, the proposed settlement was finalized and we collected $2.0 million. Neither of
these claims had been previously included in the estimated net realizable value of our assets due to substantial doubt about their collection.

As of
June 30, 2009, the remaining portfolio value is primarily comprised of a few judgments and claims against former customers (net realizable value of $2.1 million) and a few non-marketable private equity and other securities. In the majority of
these instances, we did not attribute any net realizable value to these assets due to our inability to predict the collection of any cash flows from the transactions with even a remote level of confidence. Most of these transactions were previously
included in due diligence materials in an attempt to sell the assets, but were excluded on multiple occasions by prospective buyers because of costs of collection and potential liability concerns of the buyers. Prospective buyers that specialize in
these types of residual assets and claims performed due diligence, but were not interested in making an offer. We continue to monitor these accounts for changes in facts and circumstances that would allow us to attribute value to these assets or
events that would resolve their ultimate disposition. As a result, there is the possibility that some net realizable value will be attributed to these assets in the future. An increase in the estimated net realizable value of these assets, if any,
will be reflected as a change in net assets in liquidation if and when they occur. Additionally, we continue to occasionally receive proceeds from trustees and liquidators for assets that in certain cases were written off years ago. These cash flows
are typically immaterial and are reflected as a change in net assets in liquidation as they are received. We expect that substantially all of the assets with a reasonable likelihood of collection will be monetized prior to our final wind-up.

E. Debt

A summary of our total debt outstanding on a
liquidation basis was as follows:



|                                                                |  |              |            |   |                  |   |            |  
|--------------------------------------------------------------- |  | ------------ | ---------- | - | ---------------- | - | ---------- | -
|                                                                |  | June 30,2009 |            |   | December 31,2008 |  
|Senior Notes:                                                   |  |              |            |   |                  |   |            |  
|Principal                                                       |  | $            | 1,424,166  |   |                  | $ | 1,424,166  |  
|Principal of Senior Notes estimated to not be settled or repaid |  |              | (1,349,998 | ) |                  |   | (1,298,314 | )
|                                                                |  |              |            |   |                  |   |            |  
|Senior Notes                                                    |  | $            | 74,168     |   |                  | $ | 125,852    |  
|                                                                |  |              |            |   |                  |   |            |  

During 2009, we made no principal payments and we did not make our scheduled May 15, 2009 interest payment on
the Senior Notes. Cumulative prepayments through June 30, 2009 totaled $1.54 billion, which reduced the outstanding principal to $1.4 billion and represented approximately 52% of the principal being repaid. Based on the valuation of our assets
at their estimated net realizable value and liabilities at estimated settlement amount, we currently estimate the Senior Note holders will receive additional liquidation distributions (principal and interest) of approximately $141.7 million, which
is a $2.2 million increase over our 2008 year-end estimate, but considerably less than the total principal and interest due of approximately $1.5 billion. The estimated settlement amount was determined solely based on the net assets available for
settlement of the Senior Notes and is subject to change due to changes in the estimated net realizable value of our net assets. We clearly do not have sufficient assets to fully repay the Senior Note obligation upon maturity in November 2009.



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Failure to make the May 15, 2009 interest payment was not an event of default under the Indenture, which requires
the Company to fail to pay two consecutive interest payments before an event of default occurs. The second consecutive interest payment is scheduled to coincide with the maturity date of the Senior Notes on November 15, 2009.

While the Senior Notes have a first priority security interest in substantially all of our remaining assets, the Indenture requires us to first use any cash and cash
equivalents to pay or fund operating expenses, taxes and reasonable reserves for commitments and general corporate purposes. In accordance with the terms of the Indenture, we are required to use any excess cash, as defined in the Indenture, to make
semi-annual interest and principal payments on the Senior Notes. However, as previously disclosed, we will not make any future voluntary prepayments or the one remaining scheduled interest payment. Our remaining unrestricted cash is expected to be
distributed in conjunction with the final wind-up of our affairs and the future dissolution of the Company, which is currently expected to occur by the end of November 2009, although there can be no assurance that we will be successful in meeting
that schedule.

The timing and amount of distributions to Senior Note holders will primarily depend on the resolution of legal matters, the extent to which
reserves for current or future liabilities are required, the length of time required to settle all of our matters and to a lesser extent, the timing and amounts we receive for our remaining assets. Refer below to Note G. Litigation and
Claims for the status of our outstanding legal matters and a discussion of the equity committees appeals of the Bankruptcy Courts and Delaware District Courts orders.

Stockholders should not expect any payments or distributions. The Indenture contemplates that as principal payments are made on the Senior Notes, our stockholders may
receive a distribution equal to 5.263% (i.e., 5%/95%) of each principal prepayment. Ninety-five percent (95%) of the remaining available cash after establishment of cash reserves as defined in the Indenture may be used to make prepayments of
principal on the Senior Notes and five percent (5%) is identified for distributions to and/or repurchases of stock from common stockholders. However, the Indenture prohibits us from making distributions to and/or repurchases from stockholders
if the payments would render the Company insolvent, would be a fraudulent conveyance or would not be permitted to be made under applicable law. Any such distribution and/or repurchase would be considered an impermissible restricted payment under the
Indenture.

In conjunction with the prepayments of the Senior Notes noted above, we have retained a total of $81.2 million as of June 30, 2009.
Retained amounts have been segregated and reflected as restricted cash in our financial statements, pending their final disposition. We anticipate that the retained amounts will eventually be paid to our creditors, notour stockholders. If
the funds were to be paid to our stockholders, affiliates of Berkadia (jointly owned by Leucadia and Berkshire Hathaway), which owns 50% of our common stock, would receive half of the retained amounts. Berkadia has advised us that it does not
believe that stockholders are entitled to the retained amounts since we cannot fully satisfy our creditor obligations.

As previously reported, in June
2007 the Bankruptcy Court determined that (1) we no longer need to direct funds into a restricted account, and (2) we may use those funds for general corporate purposes. On August 26, 2008, the Delaware District Court upheld the
Bankruptcy Court ruling, but on September 23, 2008, the equity committee appealed the Delaware District Courts ruling to the United Stated Court of Appeals for the Third Circuit, which has granted the equity committee a stay pending
appeal. For a further discussion of the appeal and its status, see Note G. Litigation and Claims.

F. Income Taxes

Our federal net operating loss carryforwards of $1.7 billion have remained relatively unchanged since year end. No income tax expense or benefit was recorded during the
six months ended June 30, 2009 and 2008. Any income or loss has been entirely offset by a decrease or increase in valuation allowances against deferred tax assets, which were previously established due to concerns regarding our ability to
utilize income tax benefits generated from losses in prior periods. We do not expect to be able to utilize all the deferred tax assets due to uncertainty about the amount of future earnings, a variety of loss or other tax attribute carryover
limitations in the various jurisdictions in which we file tax returns and uncertainty regarding the timing of the reversal of deferred tax liabilities.



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G. Litigation and Claims

Legal Proceedings

We are party either as plaintiff or defendant to various actions, proceedings and pending claims, including legal
actions, some of which involve claims for compensatory, punitive or other damages in significant amounts. Litigation often results from our attempts to enforce our lending agreements against borrowers and other parties to those transactions.
Litigation is subject to many uncertainties. It is possible that some of the legal actions, proceedings or claims could be decided against us. Other than the matters described below, we believe that any resulting liability from our legal proceedings
should not materially affect our net assets in liquidation or cash flows. The following matters could have a material adverse impact on our net assets in liquidation or cash flows.

Historically, it was our policy to accrue for loss contingencies, including litigation, only when the losses were probable and estimable. The determination of when losses became probable and estimable was inherently
subjective and required significant judgment. Under the liquidation basis of accounting, liabilities for loss contingencies and claims are reported at their estimated net settlement amount, which is the non-discounted amount of cash expected to be
paid to liquidate or settle an obligation in the due course of business.

If any legal proceedings were to result in a significant adverse judgment against
us, it is possible that we would not be able to satisfy that liability due to our financial condition. As previously noted, due to our financial condition, we cannot satisfy all of our secured debt obligations at maturity.

Thaxton Life Partners Litigation

As previously disclosed, on
September 29, 2006, a group of noteholders of Thaxton Life Partners, Inc. (TLP) filed suit against the Company and FINOVA Capital (the TLP Action). The TLP Action is unrelated to the previously disclosed Thaxton Group
Inc. litigation that was settled in 2007. The Company and FINOVA Capital were served with the TLP Action in February of 2007. The TLP Action purports to be a class action filed on behalf of approximately 150 TLP note holders with claims related to
approximately $20 million in TLP notes. The TLP Action alleges that, in connection with TLPs sale of its notes, the Company, FINOVA Capital, and several other defendants participated in a civil conspiracy, violated the South Carolina Unfair
Trade Practices Act, violated the civil RICO statute, and were unjustly enriched. In its various counts, the TLP Action seeks actual, treble, and/or punitive damages.

The TLP Action was filed in the South Carolina Court of Common Pleas of Lancaster County, Sixth Judicial Circuit, and was removed on February 6, 2007 to the United States District Court for the District of South
Carolina (the South Carolina District Court). We believe that all claims against both us and FINOVA Capital are without merit, and that, under the terms of the TLP notes, the TLP Action must move forward in arbitration. Upon motion by
the Company and FINOVA Capital to the South Carolina District Court seeking an order compelling such arbitration, the South Carolina District Court granted the relief sought and entered an order dismissing the action on May 30, 2007. On
June 19, 2007, the TLP plaintiffs appealed such order to the United States Court of Appeals for the Fourth Circuit (the Fourth Circuit). Further, on June 29, 2007, the TLP plaintiffs filed an arbitration demand with the
American Arbitration Association. On August 16, 2007, the Company and FINOVA Capital filed a response to the arbitration demand denying any liability. On December 20, 2007, the TLP plaintiffs appeal was denied by the Fourth Circuit.
On January 23, 2008, a petition for rehearing by the TLP plaintiffs was also denied by the Fourth Circuit. The Company and FINOVA Capital intend to vigorously defend against the TLP note holders claims asserted against the Company and
FINOVA Capital in the pending arbitration.

A hearing on the merits of the TLP Action was originally scheduled to be heard in September 2008, but was
rescheduled for mid-January 2009 due to one of the members of the arbitration panel having a scheduling conflict. The mid-January 2009 hearing was postponed due to the death of one of the three arbitrators scheduled to hear the matter. The parties
have agreed upon a new third arbitrator.

The Arbitration Panel had proposed hearing dates in early June 2009, which timing was acceptable to FINOVA. Based
upon that information and upon advice of our litigation counsel, we estimated our liquidation period to run through August 2009. However, plaintiffs objected to the June hearing dates, and on May 5, 2009, the Arbitration Panel agreed to
consider an alternative schedule. Ultimately, the current schedule was agreed to by the parties and a hearing scheduling order was issued.



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On May 12, 2009, the American Arbitration Association Panel (the Arbitration Panel) issued a hearing
scheduling order in the TLP Action establishing a briefing schedule, requiring that all written submissions be submitted by August 5, 2009, and providing for the hearing on the merits to be held on August 10, 2009, continuing for
consecutive days through August 13, 2009, if necessary.

The evidentiary portion of the hearing concluded on August 11, 2009. The Arbitration
Panel requested the parties submit post-trial briefs by August 21, 2009. The Arbitration Panel has 30 days from the submission of the post-trial briefs to render a decision.

Motion Regarding Distributions to Stockholders

As discussed more fully in Note E. Debt, the
Indenture contemplates that as principal payments are made on the Senior Notes, our stockholders may receive a distribution equal to 5.263% of each principal prepayment. However, the Indenture prohibits distribution of those amounts due to our
financial condition. Those amounts have been held in a restricted account, and totaled $81.2 million as of June 30, 2009. Because we will not be able to repay the Senior Notes in full, on April 1, 2005, we filed a motion in the Bankruptcy
Court seeking an order (1) to cease directing funds into the restricted account and (2) to allow us to use those funds for general corporate purposes.

On June 26, 2007, the Bankruptcy Court issued a final order (the Final Clarification Order) finding, among other things, that FINOVA is presently and will be forever insolvent, and lifted the requirement that FINOVA
segregate the funds into a restricted account enabling FINOVA to use these funds for general corporate purposes. The equity committee subsequently filed an appeal (on July 6, 2007) of the Final Clarification Order to the United States District
Court for the District of Delaware (the Delaware District Court) and a motion with the Delaware District Court requesting a stay (on August 31, 2007) pending final resolution of any appeal. On October 31, 2007, the Delaware
District Court granted a stay pending appeal of the Bankruptcy Courts Final Clarification Order.

FINOVA has been required to pay fees and expenses
incurred by the equity committees professionals up to an aggregate limit of $473,751. On January 10, 2008, the Bankruptcy Court ordered that the equity committee shall not submit any further motions or requests for fees and expenses
unless they prevailed in the appeal of the Final Clarification Order.

On August 26, 2008, the Delaware District Court issued a memorandum opinion and
order (the August Order) affirming all six of the Bankruptcy Courts orders and denied the equity committees motion to strike the Companys cross-appeal. The ruling by the Delaware District Court upheld the Bankruptcy
Courts Final Clarification Order and lifted the requirement that FINOVA segregate funds into a restricted account, thereby enabling FINOVA to use those funds for general corporate purposes. The ruling by the Delaware District Court also upheld
the Bankruptcy Courts orders regarding the formation of the equity committee and the multiple fee cap orders, which, as previously disclosed, were being contested by FINOVA.

The equity committee subsequently filed a motion requesting a stay in the distribution of funds held in the restricted account pending appeal of the Delaware District Courts August Order. On September 22,
2008, the Delaware District Court denied the equity committees motion to stay the Delaware District Courts August Order.

On September 23,
2008, the equity committee filed a notice of appeal to the United States Court of Appeals for the Third Circuit (the Third Circuit) with respect to those portions of the August Order that upheld the lifting of the requirement that FINOVA
segregate funds into a restricted account. On October 10, 2008, the equity committee filed a motion with the Third Circuit requesting a stay in the distribution of funds held in the restricted account pending the equity committees appeal
to the Third Circuit. On November 4, 2008, the Third Circuit granted the equity committees motion for a stay pending appeal.

All briefs
regarding the appeal have been submitted to the Third Circuit and oral argument on the appeal has been scheduled for October 2, 2009. It is possible that the Third Circuit will rule on this matter prior to year-end; however, there can be no
assurance as to the actual timing of the Third Circuits ruling. If the ruling is in the Companys favor, the equity committee could seek to appeal this ruling to the United States Supreme Court, although such appeals are rarely granted.



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H. Subsequent Events

Statement of Financial Accounting Standards No. 165, Subsequent Events, (SFAS 165) is effective for financial statements ending after June 15, 2009. SFAS 165 establishes general standards of accounting for and
disclosure of subsequent events that occur after the balance sheet date. Entities are also required to disclose the date through which subsequent events have been evaluated and the basis for that date.

We completed an evaluation of all subsequent events through August 13, 2009, which is the issuance date of these consolidated financial statements and concluded no
subsequent events occurred that required recognition or disclosure.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following section should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2008 (the 2008 Form 10-K) and the Special Note Regarding Forward-Looking
Statements included herein. Capitalized terms not defined herein are used as defined in the 2008 Form 10-K. The following discussion relates to The FINOVA Group Inc. and its subsidiaries (collectively FINOVA or the Company),
including its principal operating subsidiary, FINOVA Capital Corporation and its subsidiaries (FINOVA Capital).

OVERVIEW

Plan of Liquidation.On November 1, 2006, our Board of Directors (the Board) approved the Plan of Complete Liquidation and Dissolution (the
Plan of Liquidation) and the filing of a motion (the Motion) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court), which was approved by the Bankruptcy Court on
December 4, 2006. As a result of these approvals, we took steps to initiate our complete liquidation and as such, the information provided in this Report on Form 10-Q reflects our adoption of the liquidation basis of accounting effective the
close of business on December 4, 2006 in accordance with accounting principles generally accepted in the United States.

As of June 30, 2009, we
had substantially completed the liquidation of our asset portfolio. Our attention is now focused on the wind down of our operations, resolution of legal matters and the future dissolution of our entities. We are in the process of withdrawing our
authority to conduct business in the states that we no longer have active assets or legal requirements that necessitate our continued authorization to conduct business. As of June 30, 2009, we have completed the withdrawal process for 45
states, while others are pending. The timing and amount of distributions to Senior Note holders will primarily depend on the resolution of legal matters, the extent to which reserves for current or future liabilities are required, the length of time
required to settle all our matters and, to a lesser extent, the timing and amounts we receive for our remaining assets.

We have continued with efforts to
wind-up our affairs; however, as previously disclosed we cannot control the timing of resolving legal matters. Certain legal matters continue to take longer than anticipated to resolve, including the Thaxton Life Partners arbitration hearing, which
occurred the week of August 10, 2009, and the motion regarding distributions to stockholders, which has been scheduled for oral argument on October 2, 2009. Refer above to Note G. Litigation and Claims for a further discussion
of our outstanding legal matters.

Once the legal matters have been resolved, we believe we will still need a short period of time to complete the final
wind-up of our affairs. As a result, the reserve for estimated costs reflected in our Statement of Net Assets in Liquidation currently assumes a liquidation period through November of 2009. There can be no assurance we will complete our liquidation
in this time period, and the resolution of the various legal matters may extend for a longer period of time.

We are concerned about the continued delays
in the legal process, particularly in regards to the litigations referred to in Note G. Litigation and Claims, and how such delays continue to deplete assets available to settle our liabilities. We have evaluated and continue to consider
alternatives to complete the wind-up process, including transferring to a liquidating trust any assets not sold or distributed (subject to outstanding liabilities), depending on the progress of the outstanding legal matters. We will continue to
evaluate our progress in resolving the outstanding legal matters and re-evaluate our reserve for estimated costs.

If there is a further delay in the
Thaxton Life Partners arbitration proceedings, it is possible that the matter may not be resolved prior to the maturity date of the Senior Notes, which is November 15, 2009. As previously disclosed, FINOVA does not have sufficient assets to
fully repay the amounts due under the Senior Notes. We are not able to predict what course of action, if any, the noteholders will pursue in these circumstances.



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If the Thaxton Life Partners arbitration results in a favorable ruling prior to the maturity date of the Senior Notes, we
plan on moving forward with the final dissolution of the Company, whether or not the motion regarding distributions to stockholders has been resolved. Our intent is to complete the dissolution of the FINOVA entities under Delaware law and turn the
restricted cash over to a liquidating trustee or other liquidation agent, pending resolution of the motion regarding distributions to FINOVAs stockholders.

Forever Insolvent.As of June 30, 2009, we have repaid $1.54 billion or approximately 52% of the principal on the Senior Notes. As previously disclosed, we will not make any future voluntary prepayments or the one remaining
scheduled interest payment. Our remaining unrestricted cash is expected to be distributed in conjunction with the final wind-up of our affairs and the future dissolution of the Company, which is expected to occur by the end of November 2009,
although there can be no assurance that we will be successful in meeting that schedule. Based on the valuation of our assets at their estimated net realizable value and liabilities at estimated settlement amount, we currently estimate the Senior
Note holders will receive additional liquidation distributions (principal and interest) of approximately $141.7 million, which is a $2.2 million increase over our 2008 year-end estimate, but considerably less than the total principal and interest
due of approximately $1.5 billion. We clearly do not have sufficient assets to fully repay the Senior Note obligation. On June 26, 2007, the Bankruptcy Court issued a final order finding, among other things, that FINOVA is presently and will be
forever insolvent.

No Stockholder Payments Anticipated.While the Indenture contemplated we would make payments to our stockholders as the Senior
Notes were repaid, we have not made those payments. Distributions to stockholders are prohibited due to our financial condition. Based on our liquidation basis financial statements, we will not be able to repay approximately $1.3 billion of the
Senior Notes. As a result, stockholders should not expect any payments or return on their common stock. Funds related to the restricted distributions have been held in a segregated account, pending their final disposition. We anticipate that those
funds will eventually be paid to our creditors, not to our stockholders. If the funds were to be paid to our stockholders, affiliates of Berkadia (which are owned by Berkshire Hathaway and Leucadia), as owner of 50% of our stock, would
receive half of those payments.

As discussed in Note G. Litigation and Claims, in June 2007, the Bankruptcy Court determined that (1) we
no longer need to direct funds into a restricted account, and (2) we may use those funds for general corporate purposes. On August 26, 2008, the Delaware District Court upheld the Bankruptcy Court ruling, but on September 23, 2008,
the equity committee appealed the Delaware District Courts ruling to the United Stated Court of Appeals for the Third Circuit, and the Third Circuit has granted the equity committees motion for stay pending appeal.

No Restructuring Plan Contemplated.On numerous occasions, we have been asked whether there is some plan to restructure the Company so as to be able to realize
value from our net operating loss carryforwards (NOL). We are not formulating a restructuring plan. However, as we have noted for some time, the Board remains willing to consider legitimate proposals presented by note holders or others.
Multiple groups have made proposals or presented us with concepts designed to save the NOLs. In each and every instance to date, the proposals and concepts were determined to not be viable under the applicable tax regulations and/or did not make
economic sense.

Many obstacles exist to creation of a viable restructuring plan. A restructuring presumes a sensible business plan emerging from that
process. In light of our dwindling asset base, lack of retained business knowledge and the competitive environment, we believe it would be difficult, if not futile, in these circumstances to develop a business model that can produce returns to the
creditors and/or new investors greater than that expected from the present course. Absent that, or a substantial new investment in FINOVA, we believe it would be difficult to obtain the requisite approval to restructure the present debt obligations.
The task has become more difficult due to the substantial liquidation of our portfolio, continuation of the wind-up process and current general economic conditions. We caution investors to carefully evaluate applicable tax regulations, which
restrict the ability to transfer or use NOLs in a variety of circumstances. As previously disclosed, our financial statements do not anticipate using the NOLs. Upon final dissolution of our entities, the NOLs will be extinguished.

HIGH INVESTMENT RISK OF SECURITIES. As previously stated, we will not be able to fully repay the Senior Notes or to make any distributions to our stockholders, absent
a court order in connection with the appeal referred to above. Consequently, investing in our Senior Notes and common stock involves a high level of risk.



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CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements continue to be prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to use estimates and assumptions that affect reported
amounts of assets and liabilities. These estimates are subject to known and unknown risks, uncertainties and other factors that could materially impact the amounts reported and disclosed in the financial statements. See Item 1A. Risk
Factors and Special Note Regarding Forward-Looking Statements in our 2008 Form 10-K for more information on these risks and uncertainties. We believe the following to be among the most critical judgment areas in the application of
our accounting policies.

Liquidation Basis of Accounting

As a result of the approval of our Plan of Liquidation by the Bankruptcy Court, we took steps to initiate our complete liquidation and as such, the information provided in this Report on Form 10-Q reflects our
adoption of the liquidation basis of accounting effective the close of business on December 4, 2006 in accordance with accounting principles generally accepted in the United States. A Statement of Net Assets in Liquidation and a Statement of
Changes in Net Assets in Liquidation are the principal financial statements presented under the liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable value, which is the
non-discounted amount of cash, or its equivalent, into which an asset is expected to be converted in the due course of business less direct costs, while liabilities are reported at their estimated net settlement amount, which is the non-discounted
amounts of cash, or its equivalent, expected to be paid to liquidate an obligation in the due course of business, including direct costs. Additionally, under the liquidation basis of accounting, we are required to establish a reserve for all future
estimated general and administrative expenses and other costs expected to be incurred during the liquidation (exclusive of interest expense). These estimates will be periodically reviewed and adjusted as appropriate. There can be no assurance that
these estimated values will be realized. Such amounts should not be taken as an indication of the timing or amount of future distributions or our actual dissolution. The valuation of assets at their net realizable value and liabilities at their
anticipated settlement amount represent estimates, based on present facts and circumstances, of the net realizable value of the assets and the costs associated with carrying out the Plan of Liquidation based on the assumptions set forth below. The
actual values and costs associated with carrying out the Plan of Liquidation are expected to differ from amounts reflected in the accompanying financial statements because of the plans inherent uncertainty. These differences may be material.
In particular, the estimates of our costs will vary with the length of time necessary to complete the Plan of Liquidation. Accordingly, it is not possible to predict with certainty the timing or aggregate amount which will ultimately be distributed
to note holders and no assurance can be given that the distributions will equal or exceed the estimate presented in the accompanying Statements of Net Assets in Liquidation or the price at which our Senior Notes have traded or are expected to trade
in the future.

The following are the significant assumptions utilized by management in assessing the value of our liquidating portfolio and the expected
settlement amount of liabilities included in the Statements of Net Assets in Liquidation at June 30, 2009 and December 31, 2008.

Liquidating
Portfolio.The remaining liquidating portfolio is primarily comprised of judgments and claims against former customers and non-marketable private equity and other securities. All assets were adjusted to their estimated net realizable values,
which represented all future undiscounted cash flows expected to be collected from each of these transactions including sales and settlement proceeds, principal collections, scheduled rental payments and interest. Cash flow estimates for these
assets are based on current information obtained from trustees and others, collection efforts, customer collateral and the financial condition of these former customers. Changes in facts and assumptions have resulted in, and may in the future result
in, significant positive or negative changes to estimated cash flows and therefore, net realizable values.

Reserve for Estimated Costs during the
Liquidation Period.Under the liquidation basis of accounting, we are required to estimate and accrue for costs associated with implementing and completing the Plan of Liquidation. The reserve for estimated costs includes four primary areas of
accruals: people costs (payroll and benefits), Leucadia management fees, professional services and litigation costs and corporate expenses (insurance, directors fees and entity related expenses). Certain of these amounts can vary significantly
due to, among other things, the timing of asset sales, the timing and amounts associated with discharging known and contingent liabilities and claims, the costs associated with cessation of our operations and the costs of retaining knowledgeable
personnel and others to oversee the liquidation. As a result, we have accrued the projected costs including corporate overhead and specific liquidation costs of performance bonuses, professional fees and various other wind-up costs expected to be
incurred during the projected period to complete the liquidation and dissolution. These expense accruals will be periodically reviewed for adequacy and adjusted from time to time as projections and assumptions change. Changes to the accruals will be
recorded as adjustments to net assets in liquidation in future periods.



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CHANGES IN NET ASSETS IN LIQUIDATION

The following table summarizes the changes in net assets in liquidation for the three and six months ended June 30, 2009 and 2008 (dollars in thousands):



|                                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                            |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|                                                                            |  | 2009                       |         |   | 2008                     |   |         | 2009 |  |   | 2008    |  
|Net Assets in Liquidation, beginning of period                              |  | $                          |        |   |                          | $ |        |      |  | $ |        |   |  | $ |        |  
|                                                                            |  |                            |         |  
|Changes in net assets in liquidation:                                       |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Change in estimated net realizable value of assets and other liabilities    |  |                            | 5,423   |   |                          |   | 28      |      |  |   | 5,346   |   |  |   | 246     |  
|Interest earned on investment of cash reserves and other operating activity |  |                            | 101     |   |                          |   | 2,009   |      |  |   | 284     |   |  |   | 4,247   |  
|Change in estimated costs during the liquidation period                     |  |                            | (3,429  | ) |                          |   | (2,968  | )    |  |   | (3,396  | ) |  |   | (1,790  | )
|Interest accruing on the Senior Notes                                       |  |                            | (27,215 | ) |                          |   | (26,703 | )    |  |   | (53,918 | ) |  |   | (53,406 | )
|Reduction in the estimated settlement of the Senior Notes                   |  |                            | 25,120  |   |                          |   | 27,634  |      |  |   | 51,684  |   |  |   | 50,703  |  
|                                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net Change in Net Assets in Liquidation                                     |  | $                          |        |   |                          | $ |        |      |  | $ |        |   |  | $ |        |  
|                                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net Assets in Liquidation, end of period                                    |  | $                          |        |   |                          | $ |        |      |  | $ |        |   |  | $ |        |  
|                                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

Changes in Net Assets in Liquidation for the three months ended June 30, 2009 and 2008

During the three months ended June 30, 2009, the estimated net realizable value of our assets and liabilities increased a net $5.4 million; while during the same
period of 2008, the estimated net realizable value was virtually unchanged. The increase during 2009 was primarily due to the full recovery of a claim plus interest against a former customer and a proposed settlement of another claim for slightly
less than the full amount of the claim and interest. In August 2009, the proposed settlement was finalized and we collected $2.0 million. Neither of these claims had been previously included in the estimated net realizable value of our assets due to
substantial doubt about their collection.

Additionally, during the three months ended June 30, 2009 and 2008, we accrued $27.2 million and $26.7
million, respectively, of additional interest on the Senior Notes and earned interest income on cash investments and other operating activity of $0.1 million and $2.0 million, respectively. Any cash received in excess of an individual assets
estimated net realizable value is shown as a change in net assets in the period of collection.

The net realizable value of our assets does not take into
consideration all future interest to be earned on cash and cash equivalents. Interest earned on the investment of cash reserves is shown separately as a change in net assets. As of June 30, 2009, our short-term investments are primarily
comprised of lower risk money markets, including money markets backed by U.S. Treasuries and other government sponsored securities. The aggregate yield we are currently receiving on our cash investments is not sufficient to fully offset the costs of
the liquidation process.

As previously discussed, we established a reserve for estimated costs during the liquidation period and all future expenditures
for operating expenses are charged directly against the reserve. During the three months ended June 30, 2009, the reserve declined by $0.3 million primarily due to the payment of expenses ($3.7 million), partially offset by a $3.4 million net
increase in our estimate due to the extension of the estimated liquidation period through November of 2009. During the three months ended June 30, 2008, the reserve for estimated costs declined by $0.8 million due to the payment of expenses
($3.8 million), partially offset by a $3.0 million net increase in our estimate due to the extension of the estimate liquidation period.

We have continued
with efforts to wind-up our affairs; however, as previously disclosed we cannot control the timing of resolving legal matters. Certain legal matters continue to take longer than anticipated to resolve, including the Thaxton Life Partners arbitration
hearing, which occurred the week of August 10, 2009, and the motion regarding distributions to stockholders, which has been scheduled for oral argument on October 2, 2009. Refer above to Note G. Litigation and Claims for a
further discussion of our outstanding legal matters.



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Once the legal matters have been resolved, we believe we will still need a short period of time to complete the final
wind-up of our affairs. As a result, the reserve for estimated costs reflected in our Statement of Net Assets in Liquidation currently assumes a liquidation period through November of 2009. There can be no assurance we will complete our liquidation
in this time period, and the resolution of the various legal matters may extend for a longer period of time.

Due to the fact that we do not have
sufficient assets to fully satisfy all obligations to our creditors, any change to the estimated net realizable value of our assets and liabilities results in a corresponding adjustment to the estimated settlement amount of the Senior Notes. During
the three months ended June 30, 2009, the estimated settlement amount of the Senior Notes (principal only) was reduced by $25.1 million to a balance of $74.2 million; however, we currently estimate the Senior Note holders will receive total
liquidation distributions (principal and interest) of approximately $141.7 million, which is a $2.2 million increase over our 2008 year-end estimate.

Changes in Net Assets in Liquidation for the six months ended June 30, 2009 and 2008

During the six months ended June 30, 2009,
the estimated net realizable value of our assets and liabilities increased a net $5.3 million; while during the same period of 2008, the estimated net realizable value increased $0.2 million. The increase during 2009 was primarily due to the full
recovery of a claim plus interest against a former customer and a proposed settlement of another claim for slightly less than the full amount of the claim and interest, which was subsequently received in August. In August 2009, the proposed
settlement was finalized and we collected $2.0 million. Neither of these claims had been previously included in the estimated net realizable value of our assets due to substantial doubt about their collection. The increase during 2008 was primarily
attributed to higher than previously anticipated recoveries of cash amounts posted to secure potential obligations, partially offset by a decline in the value of certain cash investments.

Additionally, during the six months ended June 30, 2009 and 2008, we accrued $53.9 million and $53.4 million, respectively, of additional interest on the Senior
Notes and earned interest income on cash investments and other operating activity of $0.3 million and $4.2 million, respectively. Any cash received in excess of an individual assets estimated net realizable value is shown as a change in net
assets in the period of collection.

As previously discussed, we established a reserve for estimated costs during the liquidation period and all future
expenditures for operating expenses are charged directly against the reserve. During the six months ended June 30, 2009, the reserve declined by $3.6 million due to the payment of expenses of $7.0 million, partially offset by a $3.4 million net
increase in our estimate due to the extension of the estimated liquidation period through November of 2009. During the six months ended June 30, 2008, the reserve for estimated costs declined by $7.3 million due to the payment of expenses ($9.1
million) and a reduction in our estimate as a result of certain actual and future expenses being lower than previously estimated, partially offset by an increase in our estimate due to the extension of the estimated liquidation period.

Due to the fact that we do not have sufficient assets to fully satisfy all obligations to our creditors, any change to the estimated net realizable value of our
assets and liabilities results in a corresponding adjustment to the estimated settlement amount of the Senior Notes. During the six months ended June 30, 2009, the estimated settlement amount of the Senior Notes (principal only) was reduced by
$51.7 million to a balance of $74.2 million; however, we currently estimate the Senior Note holders will receive total liquidation distributions (principal and interest) of approximately $141.7 million, which is a $2.2 million increase over our 2008
year-end estimate.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Since emergence from chapter 11 bankruptcy proceedings in August 2001, our business activities have been limited to maximizing the value of our portfolio through the orderly collection of our assets. These activities
included collection efforts pursuant to underlying contractual terms, negotiation of prepayments and sales of assets or collateral. We have substantially completed the liquidation of our portfolio and our focus has shifted to the continued wind down
of our operations and future dissolution of our entities. We are prohibited by the Indenture governing our 7.5% Senior Secured Notes from engaging in any new lending activities or other business.



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Because substantially all of our assets (including cash reserves) are pledged to secure obligations under the
Intercompany Notes securing the Senior Notes, our ability to obtain additional or alternate financing is severely restricted. Berkadia has no obligation to lend additional sums to or to further invest in FINOVA. As a result of these factors and the
substantial liquidation of our portfolio, our only meaningful source of liquidity is cash reserves held by the Company.

The terms of the Indenture
prohibit us from using available funds (after certain permitted uses) for any purpose other than to satisfy our obligations to creditors and to make limited payments to stockholders in certain circumstances. Under the terms of the Indenture, we are
permitted to establish a cash reserve in an amount not to exceed certain defined criteria. Due to our limited sources of liquidity, the estimation of cash reserves is critical to our overall liquidity. Cash reserve estimations are subject to known
and unknown risks, uncertainties, and other factors that could materially impact the amounts determined. Due to the substantial liquidation of our portfolio, our incoming cash flows have significantly diminished and the estimation of cash reserves
has become increasingly more critical. Our cash reserve methodology has been altered to retain our maximum potential cash requirements. As a result, we are reserving cash for the full amount of legal claims even though we anticipate settling or
resolving the matters for considerably less.

In accordance with the terms of the Indenture, we are required to use any excess cash, as defined in the
Indenture, to make semi-annual interest and principal payments on the Senior Notes. However, as previously disclosed, we will not make any future voluntary prepayments or the one remaining scheduled interest payment. Our remaining unrestricted cash
is expected to be distributed in conjunction with the final wind-up of our affairs and the future dissolution of the Company, which is currently expected to occur by the end of November 2009, although there can be no assurance that we will be
successful in meeting that schedule.

The timing and amount of distributions to Senior Note holders will primarily depend on the resolution of legal
matters, the extent to which reserves for current or future liabilities are required, the length of time required to settle all of our matters and, to a lesser extent, the timing and amounts we receive for our remaining assets. Refer to Note G.
Litigation and Claims for the status of our outstanding legal matters.

During the six months ended June 30, 2009, we made no principal
payments and we did not make our scheduled May 15, 2009 interest payment on the Senior Notes. Cumulative prepayments through June 30, 2009 totaled $1.54 billion, which reduced the outstanding principal to $1.4 billion and represented
approximately 52% of the principal being repaid. Based on the valuation of our assets at their estimated net realizable value and liabilities at estimated settlement amount, we currently estimate the Senior Note holders will receive additional
liquidation distributions (principal and interest) of approximately $141.7 million, which is a $2.2 million increase over our 2008 year-end estimate, but considerably less than the total principal and interest due of approximately $1.5 billion. The
estimated settlement amount was determined solely based on the net assets available for settlement of the Senior Notes and is subject to change due to changes in the estimated net realizable value of our net assets. We clearly do not have sufficient
assets to fully repay the Senior Note obligation upon maturity in November 2009.

Failure to make the May 15, 2009 interest payment was not an event
of default under the Indenture, which requires the Company to fail to pay two consecutive interest payments before an event of default occurs. The second consecutive interest payment is scheduled to coincide with the maturity date of the Senior
Notes on November 15, 2009.

The Senior Notes have a first priority security interest in substantially all of our remaining assets; however, as noted
above, the Indenture requires us to first use any cash and cash equivalents to pay or to fund operating expenses, taxes and reasonable reserves for commitments and general corporate purposes.

Stockholders should not expect any payments or distributions. The Indenture contemplates that as principal payments are made on the Senior Notes, our stockholders may
receive a distribution equal to 5.263% of each principal prepayment. However, the Indenture prohibits us from making distributions to and/or repurchases from stockholders if the payments would render the Company insolvent, would be a fraudulent
conveyance or would not be permitted to be made under applicable law. Any such distribution and/or repurchase would be considered an impermissible restricted payment under the Indenture.

In conjunction with the prepayments of the Senior Notes noted above, we have retained a total of $81.2 million as of June 30, 2009. Retained amounts have been segregated and reflected as restricted cash in our
financial statements, pending their final disposition. We anticipate that the retained amounts will eventually be paid to our creditors, not our stockholders. If the funds were to be paid to our stockholders, affiliates of Berkadia (jointly
owned by Leucadia and Berkshire Hathaway), which owns 50% of our common stock, would receive half of the retained amounts. Berkadia has advised us that it does not believe that stockholders are entitled to the retained amounts since we cannot fully
satisfy our creditor obligations.



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As previously reported, in June 2007 the Bankruptcy Court determined that (1) we no longer need to direct funds into
a restricted account, and (2) we may use those funds for general corporate purposes. On August 26, 2008, the Delaware District Court upheld the Bankruptcy Court ruling, but on September 23, 2008, the equity committee appealed the
Delaware District Courts ruling to the United Stated Court of Appeals for the Third Circuit, which has granted the equity committee a stay pending appeal. For a further discussion of the appeal and its status, see Note G. Litigation and
Claims.

Based on our financial condition, there will not be sufficient funds available to fully repay the outstanding principal on the Senior
Notes or to make any 5% distribution to common stockholders, absent a court order in connection with the appeal referred to above. As a result, there will not be a return to our stockholders. Consequently, investing in the Senior Notes and common
stock involves a high level of risk.

Obligations and Commitments

For a detailed listing of our significant contractual obligations and contingent commitments, refer to our 2008 Form 10-K. There has not been any material changes during the six months ended June 30, 2009, except
for payment of our quarterly management fees ($4.0 million through June 30, 2009) to Leucadia. The reserve for estimated costs includes an additional $2.0 million, which is scheduled to be paid during the currently estimated liquidation period.

Collection of the Portfolio

As noted
previously, our business activities have been limited to maximizing the value of our portfolio through the orderly collection of assets. These activities included collection efforts pursuant to underlying contractual terms, negotiation of
prepayments and sales of assets or collateral.

The following table presents the activity in our liquidating portfolio for the six months ended
June 30, 2009:



|                                           |  |   |        |  
|------------------------------------------ |  | - | ------ | -
|Liquidating Portfolio at December 31, 2008 |  | $ | 505    |  
|Cash activity                              |  |   | (3,812 | )
|Non-cash activity                          |  |   | 5,384  |  
|                                           |  |   |        |  
|Liquidating Portfolio at June 30, 2009     |  | $ | 2,077  |  
|                                           |  |   |        |  

Our liquidating portfolio increased to $2.1 million at June 30, 2009. Cash activity for 2009 primarily
represented collections and proceeds received on judgments and claims against former customers, while the non-cash activity primarily represented an increase in the estimated net realizable value of certain assets due to the full recovery of a claim
plus interest against a former customer and a proposed settlement of another claim for slightly less than the full amount of the claim and interest. In August 2009, the proposed settlement was finalized and we collected $2.0 million. Neither of
these claims had been previously included in the estimated net realizable value of our assets due to substantial doubt about their collection.

As of
June 30, 2009, the remaining portfolio value is primarily comprised of a few judgments and claims against former customers (net realizable value of $2.1 million) and a few non-marketable private equity and other securities. In the majority of
these instances, we did not attribute any net realizable value to these assets due to our inability to predict the collection of any cash flows from the transactions with even a remote level of confidence. Most of these transactions were previously
included in due diligence materials in an attempt to sell the assets, but were excluded on multiple occasions by prospective buyers because of costs of collection and potential liability concerns of the buyers. Prospective buyers that specialize in
these types of residual assets and claims performed due diligence, but were not interested in making an offer. We continue to monitor these accounts for changes in facts and circumstances that would allow us to attribute value to these assets or
events that would resolve their ultimate disposition. As a result, there is the possibility that some net realizable value will be attributed to these assets in the future. An increase in the estimated net realizable value of these assets, if any,
will be reflected as a change in net assets in liquidation if and when they occur. Additionally, we continue to occasionally receive proceeds from trustees and liquidators for assets that in certain cases were written off years ago. These cash flows
are typically immaterial and are reflected as a change in net assets in liquidation as they are received. We expect that substantially all of the assets with a reasonable likelihood of collection will be monetized prior to our final wind-up.



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Liquidation Process

Due to the substantial liquidation of our portfolio, our incoming cash flows have significantly diminished and the estimation of cash reserves has become increasingly more critical. Our cash reserve methodology has been altered to retain
our maximum potential cash requirements. As a result, we are reserving cash for the full amount of legal claims even though we anticipate settling or resolving the matters for considerably less. As previously disclosed, we will not make any future
voluntary prepayments or the one remaining scheduled interest payment. Our remaining unrestricted cash is expected to be distributed in conjunction with the final wind-up of our affairs and the future dissolution of the Company, which is currently
expected to occur by the end of November 2009, although there can be no assurance that we will be successful in meeting that schedule.

Our liquidation
process is now focused on the wind down of our operations, resolution of legal matters and the future dissolution of our entities. We are in the process of withdrawing our authority to conduct business in the states that we no longer have active
assets or legal requirements that necessitate our continued authorization to conduct business. The estimated time required to withdraw our licenses will vary by state. Many states have only taken a month or two to complete, while certain states have
a more prolonged process that may take a number of months. Additionally, there are a handful of states such as Arizona and Delaware, among others, where we do not anticipate commencing the withdrawal process until all outstanding claims and
litigation have been resolved or active assets liquidated. As of June 30, 2009, we have completed the withdrawal process for 45 states, while others are pending.

We have continued with efforts to wind-up our affairs; however, as previously disclosed we cannot control the timing of resolving legal matters. Certain legal matters continue to take longer than anticipated to
resolve, including the Thaxton Life Partners arbitration hearing, which occurred the week of August 10, 2009, and the motion regarding distributions to stockholders, which has been scheduled for oral argument on October 2, 2009. Refer
above to Note G. Litigation and Claims for a further discussion of our outstanding legal matters.

Once the legal matters have been resolved,
we believe we will still need a short period of time to complete the final wind-up of our affairs. As a result, the reserve for estimated costs reflected in our Statement of Net Assets in Liquidation currently assumes a liquidation period through
November of 2009. There can be no assurance we will complete our liquidation in this time period, and the resolution of the various legal matters may extend for a longer period of time.

We are concerned about the continued delays in the legal process, particularly in regards to the litigations referred to in Note G. Litigation and Claims, and how such delays continue to deplete assets
available to settle our liabilities. We have evaluated and continue to consider alternatives to complete the wind-up process, including transferring to a liquidating trust any assets not sold or distributed (subject to outstanding liabilities),
depending on the progress of the outstanding legal matters. We will continue to evaluate our progress in resolving the outstanding legal matters and re-evaluate our reserve for estimated costs.

If there is a further delay in the Thaxton Life Partners arbitration proceedings, it is possible that the matter may not be resolved prior to the maturity date of the
Senior Notes, which is November 15, 2009. As previously disclosed, FINOVA does not have sufficient assets to fully repay the amounts due under the Senior Notes. We are not able to predict what course of action, if any, the noteholders will
pursue in these circumstances.

If the Thaxton Life Partners arbitration results in a favorable ruling prior to the maturity date of the Senior Notes, we
plan on moving forward with the final dissolution of the Company, whether or not the motion regarding distributions to stockholders has been resolved. Our intent is to complete the dissolution of the FINOVA entities under Delaware law and turn the
restricted cash over to a liquidating trustee or other liquidation agent, pending resolution of the motion regarding distributions to FINOVAs stockholders.

At June 30, 2009, we had four employees. The four remaining employees are scheduled to remain through the completion of the liquidation process. We believe that our staffing levels are adequate to provide us with appropriate oversight
of the smaller operation, while maintaining adequate resources to deal with outstanding legal matters and the future dissolution of our entities. We continue to operate as a public company during the liquidation under a Management Services Agreement
with Leucadia that expires in 2011.



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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report are forward-looking, in that they do not discuss historical fact, but instead reflect future expectations, projections,
intentions, or other items. Forward-looking statements are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include assumptions, estimates and valuations implicit
in the financial statements and related notes, as well as matters discussed throughout this report including, but not limited to projections, our Plan of Liquidation and the section captioned Item 2. Managements Discussion and
Analysis of Financial Condition and Results of Operations. They are also made in documents incorporated in this report by reference, or in which this report may be incorporated.

Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted or quantified. When used in this report, the words estimate, expects,
anticipates, believes, plans, intends and similar expressions are intended to identify forward-looking statements that involve known and unknown risks and uncertainties. The risks, uncertainties and
other factors that could cause our actual results or performance to differ materially from those contemplated by the forward-looking statements include, but are not limited to, the following: whether we can assure Senior Note holders of the timing
or amount of their liquidating distributions; whether potential purchasers of our assets may try to take advantage of our liquidation process and offer less-than-optimal prices for our assets; the increasing difficulty in offsetting costs of
collecting the remaining portfolio; our Board may abandon the Plan of Liquidation; whether we transfer any assets to a liquidating trust; whether new securities lawsuits will be filed against us; our ability to sell the remaining assets; current and
future legal and administrative claims and proceedings against us that may result in increased costs and diversion of managements attention; current and future obligations to creditors; our ability to meet obligations is impacted by cash
reserve estimations; cash investments are subject to credit exposure and interest rate fluctuations; our ability to retain our employees; our ability to utilize tax attributes; and our ability to be exempt from the registration requirements of the
Investment Company Act of 1940. For additional information, see Part I, Item 1A. Risk Factors in our 2008 Form 10-K.

Undue reliance should not be
placed on these forward-looking statements, which are applicable only as of the date of this Report. We do not intend to update forward-looking information to reflect actual results or changes in assumptions or other factors that could affect those
statements. We cannot predict the risk from reliance on forward-looking statements in light of the many factors that could affect their accuracy.



|Item 4T. | Controls and Procedures
|-------- | -----------------------



|(a) | Our management evaluated, with the participation of our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of June 30, 2009. Based on their evaluation, our principal executive and principal financial officers concluded that our
disclosure controls and procedures were effective as of June 30, 2009.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | There has been no change in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal
quarter ended June 30, 2009, that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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PART II OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

See Part I, Item 1, Note G.
Litigation and Claims for a discussion of certain legal proceedings.



|Item 1A. | Risk Factors
|-------- | ------------

There were no material changes from the information
provided in our Annual Report on Form 10-K for the year ended December 31, 2008.



|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                            
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                        
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                        
|     | 
|32.1 |  | Certification of Chief Executive Officer pursuant to 18. U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|     | 
|32.2 |  | Certification of Chief Financial Officer pursuant to 18. U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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THE FINOVA GROUP INC.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                      |  |  |  |                                     |  |                                                                                                           
|--------------------- |  |  |  | ----------------------------------- |  | ----------------------------------------------------------------------------------------------------------
|                      |  |  |  | THE FINOVA GROUP INC.  (Registrant)
|                      |  |  | 
|Date: August 13, 2009 |  |  |  | By:                                 |  | /s/    Richard A. Ross                                                                                    
|                      |  |  |  |                                     |  | Richard A. Ross, Senior Vice President  Chief Financial Officer & Treasurer (principal financial officer)



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EXHIBIT INDEX



|              |  |                                                                                                                                            
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                
|              | 
|31.1          |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                        
|              | 
|31.2          |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                        
|              | 
|32.1          |  | Certification of Chief Executive Officer pursuant to 18. U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|              | 
|32.2          |  | Certification of Chief Financial Officer pursuant to 18. U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.