UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                         ----------------------
                               FORM 10-K/A
                            (Amendment No. 1)

[x] Annual Report under Section 13 or 15(d) of the Securities
    Exchange Act of 1934

For the fiscal year ended June 30, 2009

[ ] Transition report under Section 13 or 15(d) of the Securities
    Exchange Act of 1934

Commission File Number 1-10324

                           THE INTERGROUP CORPORATION
                           ---------------------------
                (Exact name of registrant as specified in its charter)

           Delaware                                   13-3293645
    ------------------------------                 -----------------
   (State or other jurisdiction of                   (IRS Employer
    incorporation or organization)                 Identification No.)


10940 Wilshire Blvd., Suite 2150, Los Angeles, California     90024
---------------------------------------------------------    --------
        (Address of principal executive offices)            (Zip Code)

     Registrant's telephone number, including area code: (310) 889-2500

        Securities registered pursuant to Section 12(b) of the Act:

    Title of each class               Name of each exchange on which registered
---------------------------           -----------------------------------------
Common Stock $.01 par value                 The NASDAQ Stock Market, LLC

       Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.  [ ] Yes  [X] No

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ]

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 [X]   No [ ]

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section
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

<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendments to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.

   Large accelerated filer  [ ]                 Accelerated filer [ ]

   Non-accelerated filer    [ ]                 Smaller reporting company [X]

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

The aggregate market value of the Common Stock, $.01 Par value, held by non-
affiliates computed by reference to the closing sales price on The NASDAQ
Capital Market on December 31, 2008 (the last business day of registrant's most
recently completed second fiscal quarter) was $9,641,148.

The number of shares outstanding of registrant's Common Stock, as of September
10, 2009, was 2,327,665.

                  DOCUMENTS INCORPORATED BY REFERENCE: None

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                   EXPLANATORY NOTE ON AMENDMENT

This Amendment No. 1 on Form 10-K/A (the "Amendment") is filed by The
InterGroup Corporation (the "Company") to amend the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 2009, as filed with the Commission
on October 13, 2009 (the "Original Report"). The purposes of this Amendment is
to file updated certifications of the Company's Chief Executive Officer and
Principal Financial Officer, as well as an updated consent of the Company's
Independent Registered Public Accounting Firm, to correct an administrative
error that resulted in an improper date on the certifications and consent.

All items of the Original Report are amended and updated, if applicable, by
this Amendment and the certifications are updated as of October 14, 2009. The
Amendment does not present any changes in the financial or other information
presented in the Original Report on Form 10-K other than the following Exhibits
set forth in Part IV Item 15, which are filed herewith:

23.1   Consent of Independent Registered Public Accounting Firm - Burr
       Pilger & Mayer LLP

31.1   Certification of Chief Executive Officer of Periodic Report
       Pursuant to Rule 13a-14(a) and Rule 15d-14(a)

31.2   Certification of Principal Financial Officer of Periodic Report
       Pursuant to Rule 13a-14(a) and Rule 15d-14(a)

32.1   Certification of Chief Executive Officer Pursuant to 18
       U.S.C. Section 1350

32.2   Certification of Principal Financial Officer Pursuant to 18
       U.S.C. Section 1350.

                                    -2-
<PAGE>

                      EXPLANATORY NOTE ON RESATEMENTS

The Consolidated Financial Statements of The InterGroup Corporation
("InterGroup" or the "Company") at and for the fiscal year ended June 30, 2008,
and related financial information, have been restated to correct errors in the
accounting for the minority interest in a consolidated limited partnership,
Justice Investors, and the attribution of partnership losses related to Justice
as discussed in Note 3 of the Consolidated Financial Statements included in
Part II, Item 8 of this Annual Report. Restated balances have been identified
with the notation "restated" where appropriate and the terms "as previously
reported" will be used to refer to balances from the fiscal 2008 consolidated
financial statements prior to the restatement for the correction of errors.

We are filing this comprehensive Annual Report on Form 10-K for the fiscal year
ended June 30, 2009 with expanded financial and other disclosures in lieu of
filing a separate amended Annual report on Form 10-KSB for the fiscal year
ended June 30, 2008, and separate amended Quarterly Reports on Form 10-QSB for
the periods ended September 30, 2007, December 31, 2007 and March 31, 2008 as
well as Quarterly Reports on Form 10-Q for the periods ended September 30,
2008, December 31, 2008 and March 31, 2009. This comprehensive report is being
filed to facilitate the dissemination of current financial and other
information to investors. The Company does not intend to file a separate
amended Annual Report on Form 10-KSB for the year ended June 30, 2008, or
amended Quarterly Reports on Form 10-QSB for the periods ended September 30,
2007, December 31, 2007 and March 31, 2008, or Quarterly Reports on Form 10-Q
for the periods ended September 30, 2008, December 31, 2008 and March 31, 2009,
to reflect restated financial information. The financial information that has
been previously filed or otherwise reported for these periods is superseded by
the information in this Annual report on Form 10-K, and the financial
statements and related financial information contained in those previously
filed reports should no longer be relied upon.

                                    -3-
<PAGE>

                           TABLE OF CONTENTS

                                PART I                                 PAGE
                                ------                                 ----
Item 1.     Business.                                                     6

Item 1A.    Risk Factors.                                                15

Item 1B.    Unresolved Staff Comments.                                   15

Item 2.     Properties.                                                  16

Item 3.     Legal Proceedings.                                           21

Item 4.     Submission of Matters to a Vote of Security Holders.         21

                                PART II
                                -------

Item 5.     Market for Registrant's Common Equity, Related Stockholder   22
             Matters and Issuer Purchases of Equity Securities.

Item 6.     Selected Financial Data.                                     23

Item 7.     Management's Discussion and Analysis of Financial            23
             Condition and Results of operations.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.  33

Item 8.     Financial Statements and Supplementary Data.                 34

Item 9.     Changes in and Disagreements With Accountants on             73
             Accounting and Financial Disclosure.

Item 9A(T). Controls and Procedures.                                     73

Item 9B.    Other Information.                                           74

                                PART III
                                --------

Item 10.    Directors, Executive Officers and Corporate Governance.      75

Item 11.    Executive Compensation.                                      78

Item 12.    Security Ownership of Certain Beneficial Owners and          86
             Management and Related Stockholder Matters.

Item 13.    Certain Relationships and Related Transactions, and          88
             Director Independence.

Item 14.    Principal Accounting Fees and Services.                      89

                                PART IV
                                -------

Item 15.    Exhibits, Financial Statement Schedules.                     90

SIGNATURES                                                               93

                                    -4-
<PAGE>

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation reform Act of 1995.
Forward-looking statements give our current expectations or forecasts of future
events. You can identify these statements by the fact that they do not relate
strictly to historical or current facts. They contain words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe"
"may," "could," "might" and other words or phrases of similar meaning in
connection with any discussion of future operating or financial performance.
From time to time we also provide forward-looking statements in our Forms 10-Q
and 8-K, Annual Reports to Shareholders, press releases and other materials we
may release to the public. Forward looking statements reflect our current views
about future events and are subject to risks, uncertainties, assumptions and
changes in circumstances that may cause actual results or outcomes to differ
materially from those expressed in any forward looking statement. Consequently,
no forward looking statement can be guaranteed and our actual future results
may differ materially.

Factors that may cause actual results to differ materially from current
expectations include, but are not limited to:

    * risks associated with the lodging industry, including competition,
      increases in wages, labor relations, energy and fuel costs, actual and
      threatened pandemics, actual and threatened terrorist attacks, and
      downturns in domestic and international economic and market conditions,
      particularly in the San Francisco Bay area;

    * risks associated with the real estate industry, including changes in
      real estate and zoning laws or regulations, increases in real property
      taxes, rising insurance premiums, costs of compliance with environmental
      laws and other governmental regulations;

    * the availability and terms of financing and capital and the general
      volatility of securities markets;

    * changes in the competitive environment in the hotel industry;

    * risks related to natural disasters;

    * litigation;

    * the impact of the accounting treatment related to the restatements
      discussed in this report on the Company's ability to meet continued
      listing requirements of the NASDAQ Capital Market;

    * the impact of new accounting pronouncements on the Company's ability to
      meet continued listing requirements of the NASDAQ Capital Market; and

    * other risk factors discussed below in this Report.

We caution you not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof. We undertake no obligation to publicly
update any forward looking statements, whether as a result of new information,
future events or otherwise. You are advised, however, to consult any further
disclosures we make on related subjects on our Forms 10-K, 10-Q, and 8-K
reports to the Securities and Exchange Commission.

                                    -5-
<PAGE>

                                 PART I

Item 1. Business.

GENERAL

The InterGroup Corporation ("InterGroup" or the "Company" and may also be
referred to as "we" "us" or "our" in this report) is a Delaware corporation
formed in 1985, as the successor to Mutual Real Estate Investment Trust ("M-
REIT"), a New York real estate investment trust created in 1965.  The Company
has been a publicly-held company since M-REIT's first public offering of shares
in 1966.

The Company was organized to buy, develop, operate, rehabilitate and dispose of
real property of various types and descriptions, and to engage in such other
business and investment activities as would benefit the Company and its
shareholders.  The Company was founded upon, and remains committed to, social
responsibility.  Such social responsibility was originally defined as providing
decent and affordable housing to people without regard to race.  In 1985, after
examining the impact of federal, state and local equal housing laws, the
Company determined to broaden its definition of social responsibility.  The
Company changed its form from a REIT to a corporation so that it could pursue a
variety of investments beyond real estate and broaden its social impact to
engage in any opportunity which would offer the potential to increase
shareholder value within the Company's underlying commitment to social
responsibility.

As of June 30, 2009, the Company owned approximately 76% of the common shares
of Santa Fe Financial Corporation ("Santa Fe"), a public company (OTCBB: SFEF).
Santa Fe's revenue is primarily generated through its 68.8% owned subsidiary,
Portsmouth Square, Inc. ("Portsmouth"), a public company (OTCBB: PRSI).
InterGroup also directly owns approximately 11.7% of Portsmouth.  Portsmouth
has a 50.0% limited partnership interest in Justice Investors, a California
limited partnership ("Justice" or the "Partnership") and serves as one of two
the general partners. The other general partner, Evon Corporation ("Evon"),
served as the managing general partner of Justice until December 1, 2008. As
discussed below, the Limited Partnership Agreement was amended, effective
December 1, 2008, to provide for a change in the respective roles of the
general partners. Pursuant to that amendment, Portsmouth became the Managing
General Partner of Justice while Evon assumed the role of Co-General Partner of
Justice. The financial statements of Justice are consolidated with those of the
Company. See Note 2 to the Consolidated Financial Statements.


Most significant partnership decisions require the active participation and
approval of both general partners. Pursuant to the terms of the partnership
agreement, voting rights of the partners are determined according to the
partners' entitlement to share in the net profit and loss of the partnership.
The Company is not entitled to any additional voting rights by virtue of its
position as a general partner. The partnership agreement also provides that no
portion of the partnership real property can be sold without the written
consent of the general and limited partners entitled to more than 72% of the
net profit. As of June 30, 2009, there were 116 limited partners in Justice,
including Portsmouth and Evon.

The Company's principal business is conducted through Portsmouth's limited and
general partnership interest in Justice.  Justice owns a 544 room hotel
property located at 750 Kearny Street, San Francisco, California 94108, known
as the "Hilton San Francisco Financial District" (the "Hotel") and related
facilities, including a five level underground parking garage.

                                    -6-
<PAGE>

Historically, the Partnership's most significant source of income was a lease
between Justice and Holiday Inn for the Hotel portion of the property.  That
lease was amended in 1995, and ultimately assumed by Felcor Lodging Trust, Inc.
("Felcor") in 1998. The lease of the Hotel to Felcor was terminated effective
June 30, 2004. With the termination of the Hotel lease, Justice assumed the
role of an owner/operator with the assistance of a third party management
company. Effective July 1, 2004, the Hotel was operated as a Holiday Inn Select
brand hotel pursuant to a short term franchise agreement until it was
temporarily closed for major renovations on May 31, 2005. The Hotel was
reopened on January 12, 2006 to operate as a full service Hilton hotel,
pursuant to a Franchise License Agreement with Hilton Hotels Corporation.
Justice also has a Management Agreement with Prism Hospitality L.P. ("Prism")
to perform the day-to-day management functions of the Hotel.

Until September 30, 2008, the Partnership also derived income from the lease of
the parking garage to Evon. As discussed below, effective October 1, 2008,
Justice entered into an installment sale agreement with Evon to purchase the
remaining term of the garage lease and related garage assets. Justice also
leases a portion of the lobby level of the Hotel to a day spa operator.
Portsmouth also receives management fees as a general partner of Justice for
its services in overseeing and managing the Partnership's assets.

In addition to the operations of the Hotel, the Company also generates income
from the ownership, management and, when appropriate, sale of real estate.
Properties include eighteen apartment complexes, two commercial real estate
properties and two single-family houses.  The properties are located throughout
the United States, but are concentrated in Texas and Southern California.  The
Company also has investments in unimproved real property.  All of the Company's
California residential rental properties are managed by professional third
party property management companies.

The Company acquires its investments in real estate and other investments
utilizing cash, securities or debt, subject to approval or guidelines of the
Board of Directors and its Real Estate Investment Committee. The Company may
also look for new real estate investment opportunities in hotels, apartments,
office buildings and development properties.  The acquisition of any new real
estate investments will depend on the Company's ability to find suitable
investment opportunities and the availability of sufficient financing to
acquire such investments.  To help fund any such acquisition, the Company may
borrow funds to leverage its investment capital.  The amount of any such debt
will depend on a number of factors including, but not limited to, the
availability of financing and the sufficiency of the acquisition property's
projected cash flows to support the operations and debt service.

The Company also derives income from the investment of its cash and investment
securities assets. The Company has invested in income-producing instruments,
equity and debt securities and will consider other investments if such
investments offer growth or profit potential. See Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations for a
discussion of the Company's marketable securities and other investments.


BUSINESS DEVELOPMENTS DURING THE LAST FISCAL YEAR

Effective October 1, 2008, Justice and Evon entered into an Installment Sale
Agreement whereby the Partnership purchased all of Evon's right title and
interest in the remaining term of its lease of the parking garage, which was to
expire on November 30, 2010, and other related assets. The partnership also
agreed to assume Evon's contract with Ace Parking for the management of the
garage and any other liabilities related to the operation of the garage

                                    -7-
<PAGE>

commencing October 1, 2008. The purchase price for the garage lease and related
assets was approximately $755,000, payable in one down payment of approximately
$28,000 and 26 equal monthly installments of approximately $29,000, which
includes interest at the rate of 2.4% per annum. See Note 13 to the
Consolidated Financial Statements.

On December 1, 2008, Portsmouth and Evon, as the two general partners of
Justice, entered into a 2008 Amendment to the Limited Partnership Agreement
(the "Amendment") that provides for a change in the respective roles of the
general partners. Pursuant to the Amendment, Portsmouth assumed the role of
Managing General Partner and Evon continued on as the Co-General Partner of
Justice.  The Amendment was ratified by approximately 98% of the limited
partnership interests. The Amendment also provides that future amendments to
the Limited Partnership Agreement may be made only upon the consent of the
general partners and at least seventy five percent (75%) of the interests if
the limited partners. Consent of at least 75% of the interests of the limited
partners will also be required to remove a general partner pursuant to the
Amendment.

Concurrent with the Amendment to the Limited Partnership Agreement, a new
General Partner Compensation Agreement (the "Compensation Agreement") was
entered into on December 1, 2008, among Justice, Portsmouth and Evon to
terminate and supersede all prior compensation agreement for the general
partners. Pursuant to the Compensation Agreement, the general partners of
Justice will be entitled to receive an amount equal to 1.5% of the gross annual
revenues of the Partnership (as defined), less $75,000 to be used as a
contribution toward the cost of Justice engaging an asset manager. In no event
shall the annual compensation be less than a minimum base of approximately
$285,000, with eighty percent (80%) of that amount being allocated to
Portsmouth for its services as managing general partner and twenty percent
(20%) allocated to Evon as the co-general partner. Compensation earned by the
general partners in each calendar year in excess of the minimum base, will be
payable in equal fifty percent (50%) shares to Portsmouth and Evon.

During the year, the Company brought back in-house the management of the
remaining six residential rental properties located outside of California.
Management believes these properties can be more efficiently and effectively
managed in-house.

HILTON HOTELS FRANCHISE LICENSE AGREEMENT

On December 10, 2004, the Partnership entered into a Franchise License
Agreement with Hilton Hotels Corporation (the "Franchise Agreement") for the
right to operate the Hotel as a Hilton brand hotel.  The term of the Franchise
Agreement is for 15 years commencing on the opening date of the Hotel, January
12, 2006, with an option to extend that Agreement for another five years,
subject to certain conditions.

Pursuant to the Franchise Agreement, the Partnership pays monthly royalty fees
for the first two years of three percent (3%) of the Hotel's gross room
revenue, as defined, for the preceding calendar month; the third year will be
four percent (4%) of the Hotel's gross room revenue; and the fourth year until
the end of the term will be five percent (5%) of the Hotel's gross room
revenue.  Justice also pays a monthly program fee of four percent (4%) of the
Hotel's gross room revenue. The amount of the monthly program fee is subject to
change; however, the increase cannot exceed one percent (1%) of the Hotel gross
room revenue in any calendar year, and the cumulative increases in the monthly
fees will not exceed five percent (5%) of gross room revenue.  The Partnership
also pays a monthly information technology recapture charge of 0.75% of the
Hotel's gross revenue. In this difficult environment, Hilton agreed to reduce
its information technology fees to 0.50% for the 2009 calendar year.

                                    -8-
<PAGE>

Prior to operating the Hotel as a Hilton hotel, the Partnership was required to
make substantial renovations to the Hotel to meet Hilton standards in
accordance with a product improvement plan ("PIP") agreed upon by Hilton and
the Partnership, as well as comply with other brand standards.  That project
included a complete renovation and upgrade of all of the Hotel's guestrooms,
meeting rooms, common areas and restaurant and bar.  As of January 12, 2006,
the Hotel renovation work was substantially completed, at which time Justice
obtained approval from Hilton to open the Hotel as the "Hilton San Francisco
Financial District". The Hotel opened with a limited number of rooms available
to rent, which increased as the Hotel transitioned into full operations by the
end of February 2006.

The total cost of the construction-renovation project of the Hotel was
approximately $37,030,000, which includes approximately $630,000 in interest
costs incurred during the construction phase that were capitalized. To meet
those substantial financial commitments, and the costs of operations during the
renovation period and for the first five months when the Hotel ramped up its
operations, the Partnership has relied on additional borrowings to meet its
obligations.  As discussed in Item 2. Properties, the Partnership was able to
secure adequate financing, collateralized by the Hotel, to meet those
commitments.

HOTEL MANAGEMENT COMPANY AGREEMENTS

In February 2007, the Partnership entered into a management agreement with
Prism Hospitality ("Prism") to manage and operate the Hotel as its agent,
effective February 10, 2007. Prism is an experienced Hilton approved operator
of upscale and luxury hotels throughout the Americas. The agreement is
effective for a term of ten years, unless the agreement is extended as provided
in the agreement, and the Partnership has the right to terminate the agreement
upon ninety days written notice without further obligation. Under the
management agreement, the Partnership is to pay base management fees of 2.5% of
gross operating revenues for the fiscal year. However, 0.75% of the stated
management fee is due only if the partially adjusted net operating income for
the subject fiscal year exceeds the amount of a minimum Partnership's return
($7 million) for that fiscal year. Prism is also entitled to an incentive
management fee if certain milestones are accomplished. No incentive fees were
earned during the years ended June 30, 2009 and 2008.  In support of the
Partnership's efforts to reduce costs in this difficult economic environment ,
Prism agreed to reduce its management fees by fifty percent from January 1,
2009 through December 31, 2009 after which the original fee arrangement will
remain in effect. Management fees paid to Prism during the years ended June 30,
2009 and 2008 were $398,000 and $571,000, respectively.

Prior to the Prism management agreement, the Hotel was managed and operated by
Dow Hotel Company, LLC ("DOW") from July 1, 2004 until February 9, 2007.  On
February 9, 2007, Justice entered into an agreement with Dow Hotel Company, to
mutually terminate its management agreement and to transition the day-to-day
management responsibilities of the Hotel to Prism. The management agreement
with Dow was on the same basic terms and conditions as the agreement with
Prism, with the exception of certain provisions that were unique to the
renovation and transition of the Hotel.

                                    -9-
<PAGE>

GARAGE LEASE AND OPERATIONS

Until September 30, 2008, the garage portion of the Hotel property was leased
by the Partnership to Evon. That lease provided for a monthly rental of sixty
percent (60%) of gross parking revenues with a minimum rent of $20,000 per
month.  That lease was to expire in November 2010.  The garage lessee, Evon,
was responsible for insurance, repairs and maintenance, utilities and all taxes
assessed against the improvements to the leased premises. The garage is
operated by Ace Parking Management, Inc. ("Ace Parking") pursuant to a parking
facility management agreement. As discussed above, effective October 1, 2008,
the Partnership purchased all of Evon's right title and interest in the
remaining term of its lease and other related assets. The partnership also
assumed Evon's contract with Ace Parking for the management of the garage.

TRU SPA LEASE

Approximately 5,400 square feet of space on the lobby level of the Hotel is
leased to Tru Spa for the operation of a health and beauty spa.  The lease
expires in May 2013, with a five year option to extend the term.  The spa lease
provides for minimum monthly rent of $14,000. Minimum rental amounts are
subject to adjustment every three years based on increases in the Consumer
Price Index.

CHINESE CULTURE FOUNDATION LEASE

On March 15, 2005, the Partnership entered into an amended lease with the
Chinese Culture Foundation of San Francisco (the "Foundation") for the third
floor space of the Hotel commonly known as the Chinese Cultural Center, which
the Foundation had right to occupy pursuant to a 50-year nominal rent lease.
The amended lease requires the Partnership to pay to the Foundation a monthly
event space fee in the amount of $5,000, adjusted annually based on the local
Consumer Price Index. The term of the amended lease expires on October 17,
2023, with an automatic extension for another 10 year term if the property
continues to be operated as a hotel. This amendment allowed Justice to
incorporate the third floor into the renovation of the Hotel resulting in a new
ballroom for the joint use of the Hotel and new offices and a gallery for the
Chinese Culture Center.

COMPENSATION OF GENERAL PARTNERS

Effective May 31, 2004, and as amended on February 23, 2006, Justice entered
into a general partner compensation agreement with its two general partners,
Evon and Portsmouth, to compensate them for their services to the Partnership.
As discussed above, that compensation agreement was terminated and superseded
by the new Compensation Agreement, effective December 1, 2008.

The prior compensation agreement provided that the general partners will
receive annual base compensation of 1.5% of gross revenues, with a minimum
annual base compensation of $262,000, adjusted for inflation. From the minimum
annual base compensation, 80% was paid to Evon for its services as the managing
general partner and 20% was paid to Portsmouth as the other general partner.
Base annual compensation in excess of the minimum was payable in equal amounts
to Evon and Portsmouth. The maximum base annual compensation that could be
earned by the general partners was 1.5% of $40,000,000 of gross revenues.  The
prior compensation agreement also provided for incentive compensation to the
general partners in a sum equal to 5.0% of the annual net operating income of
Justice, that is in excess of $7,000,000, payable in equal amounts to Evon and
Portsmouth.

                                    -10-
<PAGE>

During the years ended June 30, 2009 and 2008, the general partners were paid
approximately $425,000 and $517,000, respectively, under the applicable
compensation agreements. Of those amounts, approximately $222,000 and $180,000
was paid to Portsmouth for fiscal 2009 and 2008, respectively.  No incentive
compensation was earned during the years ended June 30, 2009 and 2008.

MANAGEMENT OF RENTAL PROPERTIES

The Company may engage third party management companies as agents to manage
certain of Company's residential rental properties.

The Company entered into a Management Agreement with Century West Properties,
Inc. ("Century West") to act as an agent of the Company to rent and manage all
of the Company's residential rental properties in the Los Angeles, California
area. The Management Agreement with Century West was for an original term of
twelve months ending on July 31, 2006 and continues on a month-to-month basis,
until terminated upon 30 days prior written notice. The Management Agreement
provides for a monthly fee equal to 4% of the monthly gross receipts from the
properties with resident managers and a fee of 4 1/2% of monthly gross receipts
for properties without resident managers.  During the years ended June 30, 2009
and 2008, the management fees were $166,000 and $168,000, respectively.

During the year ended June 30, 2009, the Company terminated its property
management agreements with Productive Management and brought the property
management of its six remaining properties located outside of California back
in-house.  Management believes that the Company can manage the properties more
effectively and efficiently in-house.  During the years ended June 30, 2009 and
2008, the management fees paid to Productive were $152,000 and $236,000,
respectively.

MARKETABLE SECURITIES INVESTMENT POLICIES

In addition to its Hotel and real estate operations, the Company also invests
from time to time in income producing instruments, corporate debt and equity
securities, mortgage backed securities, securities issued by REIT's and other
companies which invest primarily in real estate.

The Company's securities investments are made under the supervision of a
Securities Investment Committee of the Board of Directors. The Committee
currently has three members and is chaired by the Company's Chairman of the
Board and President, John V. Winfield.  The Committee has delegated authority
to manage the portfolio to the Company's Chairman and President together with
such assistants and management committees he may engage.  The Committee has
established investment guidelines for the Company's investments.  These
guidelines presently include: (i) corporate equity securities should be listed
on the New York Stock Exchange (NYSE), NYSE ARCA, American Stock Exchange
(AMEX) or the Nasdaq Stock Market (NASDAQ); (ii) securities should be priced
above $5.00 per share; and (iii) investment in a particular issuer should not
exceed 5% of the market value of the total portfolio. The investment policies
do not require the Company to divest itself of investments, which initially
meet these guidelines but subsequently fail to meet one or more of the
investment criteria.  Non-conforming investments require the approval of the
Securities Investment Committee.  The Committee has in the past approved non-
conforming investments and may in the future approve non-conforming
investments.  The Securities Investment Committee may modify these guidelines
from time to time.

                                    -11-
<PAGE>

The Company may also invest, with the approval of the Securities Investment
Committee, in unlisted securities, such as convertible notes, through private
placements including private equity investment funds.  Those investments in
non-marketable securities are carried at cost on the Company's balance sheet as
part of other investments and reviewed for impairment on a periodic basis. As
of June 30, 2009, the Company had other investments of $6,567,000.

As part of its investment strategies, the Company may assume short positions in
marketable securities.  Short sales are used by the Company to potentially
offset normal market risks undertaken in the course of its investing
activities or to provide additional return opportunities.  As of June 30, 2009,
the Company had obligations for securities sold (equities short) of $2,105,000.

In addition, the Company may utilize margin for its marketable securities
purchases through the use of standard margin agreements with national brokerage
firms.  The use of available leverage is guided by the business judgment of
management and is subject to any internal investment guidelines, which may be
imposed by the Securities Investment Committee.  The margin used by the Company
may fluctuate depending on market conditions.  The use of leverage could be
viewed as risky and the market values of the portfolio may be subject to large
fluctuations.  As of June 30, 2009, the Company had a margin balance of
$4,840,000 and incurred $211,000 and $302,000 in margin interest expense during
the year ended June 30, 2009 and 2008, respectively.

As Chairman of the Securities Investment Committee, the Company's President and
Chief Executive officer, John V. Winfield, directs the investment activity of
the Company in public and private markets pursuant to authority granted by the
Board of Directors.  Mr. Winfield also serves as Chief Executive Officer
and Chairman of Santa Fe and Portsmouth and oversees the investment activity of
those companies.  Depending on certain market conditions and various risk
factors, the Chief Executive Officer, his family, Santa Fe and Portsmouth may,
at times, invest in the same companies in which the Company invests.  The
Company encourages such investments because it places personal resources of the
Chief Executive Officer and his family members, and the resources of Santa Fe
and Portsmouth, at risk in connection with investment decisions made on behalf
of the Company.

Further information with respect to investment in marketable securities and
other investments of the Company is set forth in Management Discussion and
Analysis of Financial Condition and Results of Operations section and Notes 7
and 8 of the Notes to Consolidated Financial Statements.

Seasonality

Hotel's operations historically have been seasonal. Like most hotels in the San
Francisco area, the Hotel generally maintains higher occupancy and room rates
during the first and second quarters of its fiscal year (July 1 through
December 31) than it does in the third and fourth quarters (January 1 through
June 30). These seasonal patterns can be expected to cause fluctuations in the
quarterly revenues from the Hotel.

Competition

The hotel industry is highly competitive. Competition is based on a number of
factors, most notably convenience of location, brand affiliation, price, range
of services and guest amenities or accommodations offered and quality of
customer service. Competition is often specific to the individual market in
which properties are located.

                                    -12-
<PAGE>

The Hotel is located in an area of intense competition from other hotels in the
Financial District and San Francisco in general. After being closed for more
than seven months for a substantial renovation project in fiscal year 2006, it
has taken some time for the Hotel, now operating as a Hilton, to gain
recognition as a totally upgraded and higher level property after being under
the Holiday Inn brand for almost 35 years.  The Hotel is also somewhat limited
by having only 15,000 square feet of meeting room space. Other hotels, with
greater meeting room space, may have a competitive advantage by being able to
attract larger groups and small conventions. Increased competition from new
hotels, or hotels that have been recently undergone substantial renovation,
could have an adverse effect on occupancy, average daily rate ("ADR") and room
revenue per available room ("RevPar") and put pressure on the Partnership to
make additional capital improvements to the Hotel to keep pace with the
competition.

The Hotel's target market is business travelers, leisure customers and
tourists, and small to medium size groups. Since the Hotel operates in an upper
scale segment of the market, we also face increased competition from providers
of less expensive accommodations, such as limited service hotels, during
periods of economic downturn when leisure and business travelers become more
sensitive to room rates. Like other hotels, we have experienced a significant
decrease in higher rated corporate and business travel during the last year as
many companies have severely cut their travel and entertainment budgets in
response to economic conditions.  As a result, there is added pressure on all
hotels in the San Francisco market to lower room rates in an effort to maintain
occupancy levels during such periods.

The Hotel is also subject to certain operating risks common to all of the hotel
industry, which could adversely impact performance. These risks include:

   *  Competition for guests and meetings from other hotels including
      competition and pricing pressure from internet wholesalers and
      distributors;

   *  increases in operating costs, including wages, benefits, insurance,
      property taxes and energy, due to inflation and other factors, which may
      not be offset in the future by increased room rates;

   *  labor strikes, disruptions or lock outs;

   *  dependence on demand from business and leisure travelers, which may
      fluctuate and is seasonal;

   *  increases in energy costs, cost of fuel, airline fares and other
expenses related to travel, which may negatively affect traveling;

   *  terrorism, terrorism alerts and warnings, wars and other military
      actions, SARS, swine flu, pandemic or other medical events or warnings
      which may result in decreases in business and leisure travel; and

   *  adverse effects of down turns and recessionary conditions in
      international, national and/or local economies and market conditions.


The ownership, operation and leasing of multifamily rental properties are
highly competitive. The Company competes with domestic and foreign financial
institutions, other REITs, life insurance companies, pension trusts, trust
funds, partnerships and individual investors. In addition, The Company competes

                                    -13-
<PAGE>

for tenants in markets primarily on the basis of property location, rent
charged, services provided and the design and condition of improvements. The
Company also competes with other quality apartment owned by public and private
companies. The number of competitive multifamily properties in a particular
market could adversely affect the Company's ability to lease its multifamily
properties, as well as the rents it is able to charge. In addition, other forms
of residential properties, including single family housing and town homes,
provide housing alternatives to potential residents of quality apartment
communities or potential purchasers of for-sale condominium units. The Company
competes for residents in its apartment communities based on resident service
and amenity offerings and the desirability of the Company's locations. Resident
leases at the Company's apartment communities are priced competitively based on
market conditions, supply and demand characteristics, and the quality and
resident service offerings of its communities.

Environmental Matters

In connection with the ownership of the Hotel, the Company is subject to
various federal, state and local laws, ordinances and regulations relating to
environmental protection. Under these laws, a current or previous owner or
operator of real estate may be liable for the costs of removal or remediation
of certain hazardous or toxic substances on, under or in such property. Such
laws often impose liability without regard to whether the owner or operator
knew of, or was responsible for, the presence of hazardous or toxic substances.

Environmental consultants retained by the Partnership or its lenders conducted
updated Phase I environmental site assessments in fiscal year ended June 30,
2008 on the Hotel property. These Phase I assessments relied, in part, on Phase
I environmental assessments prepared in connection with the Partnership's first
mortgage loan obtained in July 2005. Phase I assessments are designed to
evaluate the potential for environmental contamination on properties based
generally upon site inspections, facility personnel interviews, historical
information and certain publicly-available databases; however, Phase I
assessments will not necessarily reveal the existence or extent of all
environmental conditions, liabilities or compliance concerns at the properties.
Although the Phase I assessments and other environmental reports we have
reviewed disclose certain conditions on our properties and the use of hazardous
substances in operation and maintenance activities that could pose a risk of
environmental contamination or liability, we are not aware of any environmental
liability that we believe would have a material adverse effect on our business,
financial position, results of operations or cash flows.

The Company believes that the Hotel and its rental properties are in
compliance, in all material respects, with all federal, state and local
environmental ordinances and regulations regarding hazardous or toxic
substances and other environmental matters, the violation of which could have
a material adverse effect on the Company. The Company has not received written
notice from any governmental authority of any material noncompliance, liability
or claim relating to hazardous or toxic substances or other environmental
matters in connection with any of its present properties.

EMPLOYEES

As of June 30, 2008, the Company had a total of 7 full-time employees in its
corporate office. Effective July 2002, the Company entered into a client
service agreement with Administaff Companies II, L.P. ("Administaff"), a
professional employer organization serving as an off-site, full service human

                                    -14-
<PAGE>

resource department for its corporate office.  Administaff personnel management
services are delivered by entering into a co-employment relationship with the
Company's employees. There are also approximately 35 employees at the Company's
properties outside of the State of California that are subject to similar co-
employment relationships with Administaff. The employees and the Company are
not party to any collective bargaining agreement, and the Company believes that
its employee relations are satisfactory.

Employees of Justice and management of the Hotel are not unionized and the
Company believes that their employee relationships are satisfactory. Most of
the non-management employees of the Hotel are part of Local 2 of the Hotel
Employees and Restaurant Employees Union ("UNITE HERE"). In September 2007, a
new contract was reached with Local 2 that expired on August 14, 2009. While
Local 2 has sent a statutory letter to the Hotel to open negotiations, no talks
between the Hotel and union representatives have commenced to date.

The Hotel has two other labor agreements. A new contract with Stationary
Engineers, Local 39 was reached on July 31, 2009 with an effective date
retroactive to January 12, 2009 and an expiration date of January 11, 2011. A
contract with Teamsters Local 856 expired on December 31, 2008. While Local 856
also sent a statutory letter to the Hotel to open negotiations, no talks
between the Hotel and union representatives have commenced to date. At this
time, no disruptions to the operations of the Hotel are expected resulting from
the two expired and unresolved union contracts.


ADDITIONAL INFORMATION

The Company files annual and quarterly reports on Forms 10-K and 10-Q, current
reports on Form 8-K and other information with the Securities and Exchange
Commission ("SEC" or the "Commission"). The public may read and copy any
materials that we file with the Commission at the SEC's Public Reference Room
at 100 F Street, NE, Washington, DC 20549, on official business days during the
hours of 10:00 a.m. to 3:00 p.m. You may obtain information on the operation of
the Public Reference Room by calling the Commission at 1-800-SEC-0330. The
Commission also maintains an Internet site at http://www.sec.gov that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission.

Other information about the Company can be found on our website
www.intergroupcorporation.com. Reference in this document to that website
address does not constitute incorporation by reference of the information
contained on the website.


Item 1A. Risk Factors.

Not required for smaller reporting companies.

Item 1B. Unresolved Staff Comments.

The Company has one pending comment from the Staff of the Division of
Corporation Finance regarding the accounting for the minority interest of
Justice and the attribution of partnership losses. We believe that the restated
financial information set forth in this report, and in particular Note 3 to the
Consolidated Financial Statements, adequately addresses and should resolve that
comment. However, the Staff reserves the right to make further comments to the
Company's filings.

                                    -15-
<PAGE>

Item 2.  Properties.


SAN FRANCISCO HOTEL PROPERTY

The Hotel is owned directly by the Partnership. The Hotel is centrally located
near the Financial District in San Francisco, one block from the Transamerica
Pyramid. The Embarcadero Center is within walking distance and North Beach is
two blocks away.  Chinatown is directly across the bridge that runs from the
Hotel to Portsmouth Square Park. The Hotel is a 31-story (including parking
garage), steel and concrete, A-frame building, built in 1970. The Hotel has 544
well appointed guest rooms and luxury suites situated on 22 floors as well as a
5,400 square foot Tru Spa health and beauty spa on the lobby level.  The third
floor houses the Chinese Culture Center and grand ballroom.  The Hotel has
approximately 15,000 square feet of meeting room space, including the grand
ballroom. Other features of the Hotel include a 5-level underground parking
garage and pedestrian bridge across Kearny Street connecting the Hotel and the
Chinese Culture Center with Portsmouth Square Park in Chinatown.  The bridge,
built and owned by the Partnership, is included in the lease to the Chinese
Culture Center.

Since the Hotel just completed renovations, there is no present program for any
further major renovations; however, the Partnership expects to allocate
approximately 4% of gross annual Hotel revenues each year for future capital
requirements.  In the opinion of management, the Hotel is adequately covered by
insurance.

HOTEL FINANCINGS

On July 27, 2005, Justice entered into a first mortgage loan with The
Prudential Insurance Company of America in a principal amount of $30,000,000
(the "Prudential Loan").  The term of the Prudential Loan is for 120 months at
a fixed interest rate of 5.22% per annum. The Prudential Loan calls for monthly
installments of principal and interest in the amount of approximately $165,000,
calculated on a 30-year amortization schedule. The Loan is collateralized by a
first deed of trust on the Partnership's Hotel property, including all
improvements and personal property thereon and an assignment of all present and
future leases and rents. The Prudential Loan is without recourse to the limited
and general partners of Justice. The principal balance of the Prudential Loan
was $28,242,000 as of June 30, 2009.

On March 27, 2007, Justice entered into a second mortgage loan with Prudential
(the "Second Prudential Loan") in a principal amount of $19,000,000. The term
of the Second Prudential Loan is for approximately 100 months and matures on
August 5, 2015, the same date as the first Prudential Loan. The Second
Prudential Loan is at a fixed interest rate of 6.42% per annum and calls for
monthly installments of principal and interest in the amount of approximately
$119,000, calculated on a 30-year amortization schedule. The Second Prudential
Loan is collateralized by a second deed of trust on the Partnership's Hotel
property, including all improvements and personal property thereon and an
assignment of all present and future leases and rents. The Second Prudential
Loan is also without recourse to the limited and general partners of Justice.
The principal balance of the Second Prudential Loan was $18,515,000 as of June
30, 2009.

Justice also has a $2,500,000 unsecured revolving line of credit facility from
United California Bank ("UCB") that can be used for short term business
requirements. The line of credit matures on February 2, 2010 and borrowings

                                    -16-
<PAGE>

bear interest at an annual interest rate based on the Wall Street Journal
Prime Rate plus 3%, floating, with an interest rate floor of 5%. As of June 30,
2009, there was a balance of $1,811,000 drawn by Justice under the line of
credit facility, with an annual interest rate of 6.25% (Prime at 3.25% as of
June 30, 2009, plus 3%). The Partnership was not incompliance with the
financial covenants as of June 30, 2009, but received a waiver of such non-
compliance from the bank on September 16, 2009.

RENTAL PROPERTIES

At June 30, 2009, the Company's investment in real estate consisted of
properties located throughout the United States, with a concentration in Texas
and Southern California.  These properties include eighteen apartment
complexes, two single-family houses as strategic investments and two commercial
real estate properties, one of which serves as the Company's corporate
headquarters.  All properties are operating properties with exception of the
Company's corporate office.   In addition to the properties, the Company owns
approximately 4.1 acres of unimproved real estate in Texas and 2 acres of
unimproved land in Maui, Hawaii.

In the opinion of management, each of the properties is adequately covered by
insurance.  None of the properties are subject to foreclosure proceedings or
litigation, other than such litigation incurred in the normal course of
business.  The Company's rental property leases are short-term leases, with no
lease extending beyond one year.

Las Colinas, Texas.  The Las Colinas property is a water front apartment
community along Beaver Creek that was developed in 1993 with 358 units on
approximately 15.6 acres of land.  The Company acquired the complex on April
30, 2004 for approximately $27,145,000.  Depreciation is recorded on the
straight-line method, based upon an estimated useful life of 27.5 years.  Real
estate property taxes for the year ended June 30, 2009 were approximately
$556,000.  The outstanding mortgage balance was approximately $18,760,000 at
June 30, 2009 and the maturity date of the mortgage is May 1, 2013.

Morris County, New Jersey.  The Morris County property is a two-story garden
apartment complex that was completed in June 1964 with 151 units on
approximately 8 acres of land.  The Company acquired the complex on September
15, 1967 at an initial cost of approximately $1,600,000.  Real estate property
taxes for the year ended June 30, 2009 were approximately $187,000.
Depreciation is recorded on the straight-line method, based upon an estimated
useful life of 40 years.  The outstanding mortgage balance was approximately
$9,610,000 at June 30, 2009 and the maturity date of the mortgage is May 1,
2013.

St. Louis, Missouri.  The St. Louis property is a two-story project with 264
units on approximately 17.5 acres.  The Company acquired the complex on
November 1, 1968 at an initial cost of $2,328,000.  For the year ended June 30,
2009, real estate property taxes were approximately $179,000. Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $6,098,000 at June
30, 2009 and the maturity date of the mortgage is May 29, 2013.

Florence, Kentucky.  The Florence property is a three-story apartment complex
with 157 units on approximately 6.0 acres.  The Company acquired the property
on December 20, 1972 at an initial cost of approximately $1,995,000.  For the
year ended June 30, 2009, real estate property taxes were approximately

                                    -17-
<PAGE>

$47,000.  Depreciation is recorded on the straight-line method, based upon an
estimated useful life of 40 years.  The outstanding mortgage balance was
approximately $4,084,000 at June 30, 2009 and the maturity date of the mortgage
is July 1, 2014.

San Antonio, Texas. The San Antonio property is a two-story project with 132
units on approximately 4.3 acres.  The Company acquired the complex on June 29,
1993 for $2,752,000.  For the year ended June 30, 2009, real estate taxes were
approximately $148,000.  Depreciation is recorded on the straight-line method,
based upon an estimated useful life of 40 years.  The outstanding mortgage
balance was approximately $3,316,000 at June 30, 2009 and the maturity date of
the mortgage is October 30, 2011.

Austin, Texas. The Austin property is a two-story project with 249 units on
approximately 7.8 acres.  The Company acquired the complex with 190 units on
November 18, 1999 for $4,150,000.  The Company also acquired an adjacent
complex with 59 units on January 8, 2002 for $1,681,000.  For the year ended
June 30, 2009, real estate taxes were approximately $183,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $7,353,000 at June
30, 2009 and the maturity date of the mortgage is July 1, 2023.  The Company
also owns approximately 4.1 acres of unimproved land adjacent to this property.

Los Angeles, California.  The Company owns two commercial properties, twelve
apartment complexes, and two single-family houses in the general area of West
Los Angeles.

The first Los Angeles commercial property is a 5,500 square foot, two story
building that served as the Company's corporate offices until it was leased
out, effective October 1, 2009 and the Company leased a new space for its
corporate office.  The Company acquired the building on March 4, 1999 for
$1,876,000. The property taxes for the year ended June 30, 2009 were
approximately $28,000.  Depreciation is recorded on the straight-line method,
based upon an estimated useful life of 40 years.  The outstanding mortgage
balance was approximately $1,191,000 at June 30, 2009 and the maturity date of
the mortgage is March 25, 2014.

The second Los Angeles commercial property is a 5,900 square foot commercial
building.  The Company acquired the building on September 15, 2000 for
$1,758,000. The property taxes for the year ended June 30, 2009 were
approximately $13,000.  Depreciation is recorded on the straight-line method,
based upon an estimated useful life of 40 years.  The outstanding mortgage
balance was approximately $691,000 at June 30, 2009 and the maturity date of
the mortgage is December 15, 2030.

The first Los Angeles apartment complex is a 10,600 square foot two-story
apartment with 12 units.  The Company acquired the property on July 30, 1999 at
an initial cost of approximately $1,305,000.  For the year ended June 30,
2006, real estate property taxes were approximately $19,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $969,000 at June 30,
2009 and the maturity date of the mortgage is December 1, 2018.

The second Los Angeles apartment complex is a 29,000 square foot three-story
apartment with 27 units.  This complex is held by Intergroup Woodland Village,
Inc. ("Woodland Village"), which is 55.4% and 44.6% owned by Santa Fe and the
Company, respectively.  The property was acquired on September 29, 1999 at an
initial cost of approximately $4,075,000.  For the year ended June 30, 2009,
real estate property taxes were approximately $56,000.  Depreciation is

                                    -18-
<PAGE>

recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $1,717,000 at June
30, 2009 and the maturity date of the mortgage is October 1, 2029.

The third Los Angeles apartment complex is a 12,700 square foot apartment with
14 units.  The Company acquired the property on October 20, 1999 at an initial
cost of approximately $2,150,000.  For the year ended June 30, 2009, real
estate property taxes were approximately $32,000.  Depreciation is recorded on
the straight-line method, based upon an estimated useful life of 40 years.  The
outstanding mortgage balance was approximately $1,015,000 at June 30, 2009 and
the maturity date of the mortgage is November 1, 2029.

The fourth Los Angeles apartment complex is a 10,500 square foot apartment with
9 units.  The Company acquired the property on November 10, 1999 at an initial
cost of approximately $1,675,000.  For the year ended June 30, 2009, real
estate property taxes were approximately $25,000.  Depreciation is recorded on
the straight-line method, based upon an estimated useful life of 40 years.  The
outstanding mortgage balance was approximately $760,000 at June 30, 2009 and
the maturity date of the mortgage is December 31, 2029.

The fifth Los Angeles apartment complex is a 26,100 square foot two-story
apartment with 31 units.  The Company acquired the property on May 26, 2000 at
an initial cost of approximately $7,500,000.  For the year ended June 30, 2009,
real estate property taxes were approximately $97,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $3,750,000 at June
30, 2009 and the maturity date of the mortgage is August 1, 2033.

The sixth Los Angeles apartment complex is a 27,600 square foot two-story
apartment with 30 units.  The Company acquired the property on July 7, 2000 at
an initial cost of approximately $4,411,000.  For the year ended June 30, 2009,
real estate property taxes were approximately $64,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years. In June 2003, the operations of this property stopped and in December
2003, major renovations of the property began.  In May 2004, the Company
obtained a construction loan in the amount of $6,268,000 as part of a major
renovation.  In July 2006, the renovation of the property was completed and
renting of the apartments commenced.  In August 2007, the construction loan was
refinanced to a note payable in the amount of $6,850,000. This amount is the
outstanding balance of the mortgage as of June 30, 2009.  The maturity date of
the mortgage is September 1, 2022.

The seventh Los Angeles apartment complex is a 3,000 square foot apartment with
4 units.  The Company acquired the property on July 19, 2000 at an initial cost
of approximately $1,070,000.  For the year ended June 30, 2009, real estate
property taxes were approximately $15,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $407,000 at June 30,
2009 and the maturity date of the mortgage is August 1, 2030.

The eighth Los Angeles apartment complex is a 4,500 square foot two-story
apartment with 4 units.  The Company acquired the property on July 28, 2000 at
an initial cost of approximately $1,005,000.  For the year ended June 30, 2009,
real estate property taxes were approximately $15,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $681,000 at June 30,
2009 and the maturity date of the mortgage is December 1, 2018.

The ninth Los Angeles apartment complex is a 7,500 square foot apartment with 7
units.  The Company acquired the property on August 9, 2000 at an initial cost
of approximately $1,308,000.  For the year ended June 30, 2009, real estate
property taxes were approximately $19,000.  Depreciation is recorded on the

                                    -19-
<PAGE>

straight-line method, based upon an estimated useful life of 40 years.  The
outstanding mortgage balance was approximately $1,001,000 at June 30, 2009 and
the maturity date of the mortgage is December 1, 2018.

The tenth Los Angeles apartment complex is a 32,800 square foot two-story
apartment with 24 units.  The Company acquired the property on March 8, 2001 at
an initial cost of approximately $2,859,000.  For the year ended June 30, 2009,
real estate property taxes were approximately $41,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $1,610,000 at June
30, 2009 and the maturity date of the mortgage is April 1, 2031.

The eleventh Los Angeles apartment complex is a 13,000 square foot two-story
apartment with 8 units.  The Company acquired the property on May 1, 2001 at an
initial cost of approximately $1,206,000.  For the year ended June 30, 2009,
real estate property taxes were approximately $17,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of 40
years.  The outstanding mortgage balance was approximately $529,000 at June 30,
2009 and the maturity date of the mortgage is November 1, 2029.

The twelfth Los Angeles apartment complex, which is owned 100% by the Company's
subsidiary Santa Fe, is a 4,200 square foot two-story apartment with 2 units.
Santa Fe acquired the property on February 1, 2002 at an initial cost of
approximately $785,000. For the year ended June 30, 2009, real estate property
taxes were approximately $11,000. Depreciation is recorded on the straight-line
method based upon an estimated useful Life of 40 years.  The outstanding
mortgage balance was approximately $415,000 at June 30, 2009 and the maturity
date of the mortgage is January 18, 2032.

The first Los Angeles single-family house is a 2,771 square foot home.  The
Company acquired the property on November 9, 2000 at an initial cost of
approximately $660,000.  For the year ended June 30, 2009, real estate property
taxes were approximately $9,000.  Depreciation is recorded on the straight-line
method, based upon an estimated useful life of 40 years.  The outstanding
mortgage balance was approximately $442,000 at June 30, 2009 and the maturity
date of the mortgage is December 1, 2030.

The second Los Angeles single-family house is a 2,201 square foot home.  The
Company acquired the property on August 22, 2003 at an initial cost of
approximately $700,000.  For the year ended June 30, 2009, real estate property
taxes were approximately $11,000.  Depreciation is recorded on the straight-
line method, based upon an estimated useful life of 40 years.  The
outstanding mortgage balance was approximately $482,000 at June 30, 2009 and
the maturity date of the mortgage is November 1, 2033.

In August 2004, the Company purchased an approximately two acre parcel of
unimproved land in Kihei, Maui, Hawaii for $1,467,000.  The Company intends to
obtain the entitlements and permits necessary for the joint development of the
parcel with an adjoining landowner into residential units. After the completion
of this predevelopment phase, the Company will determine whether it more
advantageous to sell the entitled property or to commence with construction.


MORTGAGES

Further information with respect to mortgage notes payable of the Company is
set forth in Note 11 of the Notes to Consolidated Financial Statements.

                                    -20-
<PAGE>

ECONOMIC AND PHYSICAL OCCUPANCY RATES

The Company leases units in its residential rental properties on a short-term
basis, with no lease extending beyond one year.  The economic occupancy (gross
potential less rent below market, vacancy loss, bad debt, discounts and
concessions divided by gross potential rent) and the physical occupancy(gross
potential rent less vacancy loss divided by gross potential rent) for each of
the Company's operating properties for fiscal year ended June 30, 2009 are
provided below.

                                        Economic              Physical
         Property                       Occupancy             Occupancy
         --------                       ---------            ----------
         Apartments:

         1.  Las Colinas,TX                73%                    88%
         2.  Morris County, NJ             86%                    98%
         3.  St. Louis, MO                 89%                    93%
         4.  Florence, KY                  90%                    96%
         5.  San Antonio, TX               77%                    87%
         6.  Austin, TX                    68%                    88%
         7.  Los Angeles, CA (1)           77%                    84%
         8.  Los Angeles, CA (2)           70%                    98%
         9.  Los Angeles, CA (3)           95%                    98%
         10. Los Angeles, CA (4)           90%                   100%
         11. Los Angeles, CA (5)           69%                    98%
         12. Los Angeles, CA (6)           74%                    86%
         13. Los Angeles, CA (7)           90%                    95%
         14. Los Angeles, CA (8)           87%                    92%
         15. Los Angeles, CA (9)           95%                   100%
         16. Los Angeles, CA (10)          85%                    97%
         17. Los Angeles, CA (11)          94%                    95%
         18. Los Angeles, CA (12)         100%                   100%

The Company's Los Angeles, California properties are subject to various rent
control laws, ordinances and regulations which impact the Company's ability to
adjust and achieve higher rental rates.


Item 3.  LEGAL PROCEEDINGS

The Company is not subject to any legal proceedings requiring disclosure.


Item 4.  Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Report.

                                    -21-
<PAGE>

                               PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

The Company's Common Stock is listed and trades on the NASDAQ Capital Market
tier of the NASDAQ Stock Market, LLC under the symbol: "INTG".  The following
table sets forth the high and low sales prices for the Company's common stock
for each quarter of the last two fiscal years ended June 30, 2009 and 2008 as
reported by NASDAQ.


Fiscal 2009                           High                Low
-----------                           -----               -----
First Quarter 7/1 - 9/30             $17.40              $10.37
Second Quarter 10/1 - 12/31          $16.84              $ 8.60
Third Quarter 1/1 - 3/31             $12.91              $ 6.54
Fourth Quarter 4/1 - 6/30            $12.84              $ 7.55


Fiscal 2008                           High                Low
-----------                           -----               -----
First Quarter 7/1 - 9/30             $18.48              $15.90
Second Quarter 10/1 - 12/31          $18.94              $17.52
Third Quarter 1/1 - 3/31             $28.50              $16.53
Fourth Quarter 4/1 - 6/30            $18.19              $15.78


As of September 10, 2009, the approximate number of holders of record of the
Company's Common Stock was 700.  Such number of owners was determined from the
Company's shareholders records and does not include beneficial owners of the
Company's Common Stock whose shares are held in names of various brokers,
clearing agencies or other nominees.  Including beneficial holders, there are
approximately 1,100 shareholders of the Company's Common Stock.


DIVIDENDS

The Company has not declared any cash dividends on its common stock and does
not foresee issuing cash dividends in the near future.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

This information appears in Part III, Item 12 of this report.


ISSUER PURCHASES OF EQUITY SECURITIES

The following table reflects purchases of its common stock made by the Company,
for its own account, during the last quarter of fiscal 2009.

                                    -22-
<PAGE>
<TABLE>

                   ISSUER PURCHASES OF EQUITY SECURITIES

                                            (c)Total Number         (d)Maximum Number
             (a)Total         (b)           of Shares Purchased     of Shares that May
Fiscal        Number of      Average         as Part of Publicly     Yet Be Purchased
 2009          Shares       Price Paid        Announced Plans         Under the Plans
Period       Purchased      Per Share         or Programs             or Programs (1)
--------------------------------------------------------------------------------------
<S>           <C>           <C>               <C>                       <C>
Month #1
(April 1-         -              -                 -                      9,258
April 30)
--------------------------------------------------------------------------------------
Month #2
(May 1-       3,046         $10.47             3,046                      6,212
May 31)
--------------------------------------------------------------------------------------
Month #3
(June 1-     25,200         $12.15            25,200                    106,012
June 30)
--------------------------------------------------------------------------------------
Total        28,246         $11.97            28,246                    106,012
--------------------------------------------------------------------------------------
</TABLE>

The Company has only one stock repurchase program.  The program was initially
announced on January 13, 1998 and was amended on February 10, 2003 and October
12, 2004. The total number of shares authorized to be repurchased pursuant to
those prior authorizations was 870,000, adjusted for stock splits.  On June 3,
2009, the Board of Directors authorized the Company to purchase up to an
additional 125,000 shares of Company's common stock. The purchases will be
made, in the discretion of management, from time to time, in the open market or
through privately negotiated third party transactions depending on market
conditions and other factors.  The Company's repurchase program has no
expiration date and can be amended from time to time in the discretion of the
Board of Directors. No plan or program expired during the period covered by the
table.


Item 6. Selected financial Data.

Not required for smaller reporting companies.


Item 7. Management Discussion and Analysis of Financial Condition
        and Results of Operations.

RESULTS OF OPERATIONS

The Company's principal business is conducted through Portsmouth's general and
limited partnership interest in Justice, rental income from its investments in
multi-family real estate properties and income received from investment of its
cash and securities assets.  Portsmouth has a 50.0% limited partnership
interest in Justice and serves as the managing general partner of Justice. Evon
Corporation ("Evon") serves as the other general partner. Justice owns the
land, improvements and leaseholds at 750 Kearny Street, San Francisco,
California, known as the Hilton San Francisco Financial District (the "Hotel").
The financial statements of Justice have been consolidated with those of the
Company. See Note 2 to the Consolidated Financial Statements.

                                    -23-

The Hotel is operated by the Partnership as a full service Hilton brand hotel
pursuant to a Franchise License Agreement with Hilton Hotels Corporation. The
term of the Agreement is for a period of 15 years commencing on January 12,
2006, with an option to extend the license term for another five years, subject
to certain conditions. Justice also has a Management Agreement with Prism
Hospitality L.P. ("Prism") to perform the day-to-day management functions of
the Hotel.

Until September 30, 2008, the Partnership also derived income from the lease of
the parking garage to Evon.  Effective October 1, 2008, Justice entered into an
installment sale agreement with Evon to purchase the remaining term of the
garage lease and related garage assets and assumed the contract with Ace
Parking for the operations of the garage. Justice also leases a portion of the
lobby level of the Hotel to a day spa operator.  Portsmouth also receives
management fees as a general partner of Justice for its services in overseeing
and managing the Partnership's assets. Those fees are eliminated in
consolidation.

In addition to the operations of the Hotel, the Company also generates income
from the ownership and management of real estate.  Properties include eighteen
apartment complexes, two commercial real estate properties, and two single-
family houses as strategic investments.  The properties are located throughout
the United States, but are concentrated in Texas and Southern California.  The
Company also has investments in unimproved real property.  All of the Company's
residential rental properties with exception of the San Antonio and Las
Colinas, Texas properties, are managed by professional third party property
management companies.

The Company acquires its investments in real estate and other investments
utilizing cash, securities or debt, subject to approval or guidelines of the
Board of Directors.  The Company also invests in income-producing instruments,
equity and debt securities and will consider other investments if such
investments offer growth or profit potential.


For the Year Ended June 30, 2009 as compared to June 30, 2008.

As discussed in Note 3 to the Consolidated Financial Statements, the Company
has restated its consolidated financial statements for the fiscal year ended
June 30, 2008. The consolidated statements of operations were restated to give
effect to an accounting treatment that requires the Company to take 100% of the
losses of Justice, rather than just the portion attributable to Portsmouth's
50% limited partnership interest, due to the fact that there was accumulated
deficit in partners' equity at Justice.  The restatements do not have an impact
on the previously reported revenues, operating expenses, income from
operations, other income (expense) or income tax provisions.

The Company had net income of $389,000 for the year ended June 30, 2009
compared to a net loss of $1,037,000 for the year ended June 30, 2008. The
change is primarily attributable to the net gain on marketable securities of
$6,132,000 in fiscal 2009 compared to a net loss of $1,561,000 in fiscal 2008,
partially offset by the gain on sale of real estate of $4,074,000 in the fiscal
2008 and the increase in the loss from Hotel operations in fiscal 2009.

                                    -24-
<PAGE>



The following table sets forth a more detailed presentation of Hotel operations
for the years ended June 30, 2009 and 2008.

<TABLE>

For the years ended June 30,                                    2009            2008
                                                             ----------      ----------
<S>                                                        <C>              <C>
Hotel revenues:
 Hotel rooms                                               $ 25,237,000     $29,426,000
 Food and beverage                                            4,911,000       6,017,000
 Garage                                                       2,104,000       1,602,000
 Other operating departments                                    569,000         733,000
                                                             ----------      ----------
  Total hotel revenues                                       32,821,000      37,778,000
                                                             ----------      ----------
Operating expenses excluding interest, depreciation
  and amortization                                          (28,015,000)    (31,870,000)
                                                             ----------      ----------
Operating income before interest, depreciation and
 amortization                                                 4,806,000       5,908,000
Interest expense                                             (2,873,000)     (2,858,000)
Depreciation and amortization expense                        (4,655,000)     (4,660,000)
                                                             ----------      ----------
Loss from hotel operations                                  $(2,722,000)    $(1,610,000)
                                                             ==========      ==========

</TABLE>

For the fiscal year ended June 30, 2009, the Hotel generated operating income
of approximately $4,806,000 before interest, depreciation and amortization, on
operating revenues of approximately $32,821,000 compared to operating income of
approximately $5,908,000 before interest, depreciation and amortization, on
operating revenues of approximately $37,778,000 for the fiscal year ended June
30, 2008. Despite a significant decrease in total operating revenues of
approximately $4,957,000, Hotel operating income declined by only $1,102,000,
of which $684,000 was attributable to a one-time loss on the termination of the
garage lease which is included in operating expenses. The Hotel was able to
achieve those results in a very difficult economic environment primarily due to
a significant reduction in operating expenses of approximately $3,855,000 from
fiscal 2008 and an increase in garage revenues due to the termination of the
garage lease effective October 1, 2008 and the integration of those operations
into those of the Hotel.

Room revenues decreased by approximately $4,189,000 for the fiscal year ended
June 30, 2009 when compared to the fiscal year ended June 30, 2008 and food and
beverage revenues decreased by approximately $1,106,000 for the same period.
The decrease in room revenues was primarily attributable to a decline in
average daily room rates as hotels in the San Francisco market began to reduce
room rates beginning in October 2008 in an effort to maintain occupancy levels
in an increasingly more competitive market as economic conditions continued to
deteriorate. The decrease in food and beverage revenues is primarily
attributable to decline in banquet and catering business as companies
dramatically cut back on business travel, corporate meetings and events.

The following table sets forth the average daily room rate, average occupancy
percentage and room revenue per available room ("RevPar") of the Hotel for the
fiscal years ended June 30, 2009 and 2008.

Fiscal Year Ended          Average           Average
     June 30,             Daily Rate        Occupancy%         RevPar
-----------------         ----------        ---------         --------
      2009                   $157              81%              $127
      2008                   $176              84%              $148

                                    -25-
<PAGE>

The full impact of the downturn in the domestic and international economies and
markets began to be felt by the operations of the Hotel in September 2008 and
that downturn is expected to continue at least through calendar 2009 with a
modest improvement in the latter part of calendar 2010. The lodging industry
was particularly hard hit by a steep decline in room rates resulting from the
sharp deterioration in the higher rated business travel segment forcing hotels
to support occupancy with lower rated Internet and discount business. As a
result, the Hotel's RevPar decline of approximately $21 in fiscal 2009 was
primarily attributable to a decline in average daily room rates of
approximately $19, while occupancy declined by a modest 3%.

Facing difficult economic conditions and a decline in business, group and
leisure travel, both domestic and international, management has continued to
focus on ways to improve efficiencies and reduce operating costs and other
expenses in its efforts to stabilize and maintain operating income of the
Hotel. One significant step was to move lunch and dinner services from the
restaurant to the lounge to create a more intimate, yet lively, atmosphere and
to complement the new wine bar "Flyte" in the lobby of the Hotel. That
initiative appears to be working as the Hotel reduced the operating losses from
its food and beverage operations to approximately $132,000 in fiscal 2009 from
approximately $214,000 in fiscal 2008. We have also initiated numerous energy
saving programs that have resulted in additional cost savings. The Hotel's
management company has added further support to those efforts by agreeing to
reduce its management fees by fifty percent for the 2009 calendar year. As a
result, we have seen further reductions in operating costs of the Hotel as a
percentage of Hotel revenues for the fiscal year ended June 30, 2009.
Management will continue to explore new and innovative ways to improve
operations and enhance the guest experience.

General and administrative expenses decreased to $1,663,000 for the year ended
June 30, 2009 from $1,817,000 for the year ended June 30, 2008 primarily as the
result of the decrease in accounting related fees.

The Company's real estate operations for the year ended June 30, 2009 remained
relatively consistent with the comparable prior year.  The Company had real
estate revenues of $12,787,000 for the year ended June 30, 2009 compared to
revenues of $12,833,000 for the year ended June 30, 2008.  Operating expenses
was $6,337,000 for fiscal 2009 compared to $6,296,000 for fiscal 2008.
Although the Company operated in a tougher economic environment in fiscal 2009,
the Company's real estate operations remained relatively consistent with
comparable prior year period. Management continues to review and analyze the
Company's real estate operations to improve occupancy and rental rates, reduce
expenses and improve efficiencies.

During the year ended June 30, 2009, the Company terminated its property
management agreement with Productive Management and brought the management of
its six remaining properties located outside of California back in-house.
Management believes that the Company can manage the properties more effectively
and efficiently in-house.  The removal of the management company will save the
Company annually over $150,000 in property management fees alone.

As of June 30, 2009, the Company had listed for sale its 249-unit apartment
complex located in Austin, Texas and its 132-unit apartment complex located in
San Antonio, Texas.  These properties are classified as held for sale on the
Company's consolidated balance sheet with the operations of these properties
classified under discontinued operations in the consolidated statements of
operations.  No depreciation expense is recorded on these two properties.

                                    -26-
<PAGE>

In August 2007, the Company sold its 224-unit apartment complex located in
Irving, Texas for $8,050,000 and recognized a gain on the sale of real estate
of $4,074,000 which is included in discontinued operations.  The revenues and
expenses from the operation of this property for the year ended June 30, 2008
have been classified as income from discontinued operations in the consolidated
statements of operations.

The Company had a net gain on marketable securities of $6,132,000 for the year
ended June 30, 2009 as compared to a net loss on marketable securities of
$1,561,000 for the year ended June 30, 2008.  For the year ended June 30, 2009,
the Company had a net realized gain of $1,190,000 and a net unrealized gain of
$4,942,000.  For the year ended June 30, 2008, the Company had a net realized
gain of $1,879,000 and a net unrealized loss of $3,440,000.  Gains and losses
on marketable securities and other investments may fluctuate significantly from
period to period in the future and could have a significant impact on the
Company's net income.  However, the amount of gain or loss on marketable
securities and other investments for any given period may have no predictive
value and variations in amount from period to period may have no
analytical value.  For a more detailed description of the composition of the
Company's marketable securities please see the Marketable Securities section
below.

The Company may also invest, with the approval of the Securities Investment
Committee, in private investment equity funds and other unlisted securities,
such as convertible notes through private placements. Those investments in non-
marketable securities are carried at cost on the Company's balance sheet as
part of other investments, net of other than temporary impairment losses. As of
June 30, 2009 and 2008, the Company had net other investments of $6,567,000 and
$6,798,000, respectively. During the years ended June 30, 2009 and 2008, the
Company performed an impairment analysis of its other investments and
determined that its investments had other than temporary impairments and
recorded impairment losses of $1,300,000 and $1,253,000, respectively.

Margin interest and trading expenses decreased to $1,186,000 for the year ended
June 30, 2009 from $1,625,000 for the year ended June 30, 2008 due to the
decrease in trading related expenses and the decrease in margin interest to
$211,000 from $302,000.  The decrease is the result of the maintenance of lower
margin balances.

For income tax purposes, the Company can only record a tax benefit pertaining
50% of losses of Justice representing its ownership interest as opposed to the
100% of the losses of Justice that is required to be recognized under GAAP.
During the year ended June 30, 2009, the provision for income tax benefit
(expense) changed to an expense of $944,000 ($827,000 from continuing
operations and $117,000 from discontinued operations) from a net benefit of
$297,000 ($2,005,000 benefit from continuing operations less $1,708,000 from
discontinued operations) for the year ended June 30, 2008.   The effective tax
rate is significantly different for the year ended June 30, 2009 as compared to
the year ended June 30, 2008, primarily due to the percentage change in the
loss from Justice compared the Company's consolidated pre-tax income.

Minority interest, net of tax related to the Company's other subsidiaries
decreased to $627,000 for the year ended June 30, 2009 from $1,213,000 for the
year ended June 30, 2008 primarily as the result of the lower net losses
incurred by the Company's subsidiaries.

                                    -27-
<PAGE>

MARKETABLE SECURITIES AND OTHER INVESTMENTS

As of June 30, 2009 and 2008, the Company had investments in marketable equity
securities of $13,920,000 and $6,706,000, respectively.  The following table
shows the composition of the Company's marketable securities portfolio by
selected industry groups as:

   June 30, 2009                                              % of Total
                                                              Investment
   Industry Group                      Market Value           Securities
   --------------                      ------------           ----------
   Dairy products                      $  5,433,000               39.0%
   REITs and financial                    3,835,000               27.6%
   Basic materials and energy             1,733,000               12.4%
   Electronic traded funds(ETFs)          1,328,000                9.5%
   Services                                 376,000                2.7%
   Other                                  1,215,000                8.8%
                                         ----------              ------
                                       $ 13,920,000              100.0%
                                         ==========              ======

   June 30, 2008                                              % of Total
                                                              Investment
   Industry Group                      Market Value           Securities
   --------------                      ------------           ----------
   Dairy products                      $  1,540,000               23.0%
   Communications                         1,123,000               16.7%
   Financial                                721,000               10.8%
   Basic materials                          654,000                9.8%
   Medical                                  467,000                7.0%
   Transportation                           442,000                6.6%
   Others                                 1,759,000               26.1%
                                         ----------              ------
                                       $  6,706,000              100.0%
                                         ==========              ======

The Company's investment portfolio is diversified with 74 different equity
securities.  The Company has three individual positions that comprise more than
5% of the equity value of the portfolio with the largest being 23% of the
value of the portfolio.  The amount of the Company's investment in any
particular issue may increase or decrease, and additions or reductions to its
securities portfolio may occur, at any time.  While it is the internal policy
of the Company to limit its initial investment in any single equity to less
than 5% of its total portfolio value, that investment could eventually exceed
5% as a result of equity appreciation or reductions in other positions.

The following table shows the net gain(loss) on the Company's marketable
securities and the associated margin interest and trading expenses for the
respective years:

For the years ended June 30,               2009                   2008
                                       ------------           ------------
Net investment gain(loss)               $ 6,132,000           $ (1,561,000)
Impairment loss on other investments     (1,300,000)            (1,253,000)
Dividend and interest income                205,000                199,000
Margin interest                            (211,000)              (302,000)
Trading expenses                           (975,000)            (1,323,000)
                                       ------------           ------------
                                       $  3,851,000           $ (4,240,000)
                                       ============           ============

                                    -28-
<PAGE>

The Company may also invest, with the approval of the Securities Investment
Committee, in private investment equity funds and other unlisted securities,
such as convertible notes through private placements. Those investments in non-
marketable securities are carried at cost on the Company's balance sheet as
part of other investments, net of other than temporary impairment losses.

As of June 30, 2009 and 2008, the Company had net other investments of
$6,567,000 and $6,798,000, respectively.  During the years ended June 30, 2009
and 2008, the Company made investments in corporate debt instruments of a
public company in the basic materials sector totaling $1,500,000 and
$1,275,000, respectively. As of June 30, 2009 and 2008, the Company had
investments in this company, net of impairment losses, totaling $750,000 and
$64,000, respectively.  These amounts are included as a part of other
investments, net on the consolidated balance sheets.

During the years ended June 30, 2009 and 2008, the Company received common
stock issued upon conversion or as payment of interest and penalties on
convertible notes in this company.  Through sales of this common stock, the
Company was able to recover approximately $1,984,000 and $1,683,000 of its
investments during the years ended June 2009 and 2008.  The sales of this
common stock were recognized as realized gains in the consolidated statement of
operations in the respective years.  As of June 30, 2009, the Company had
$787,000 of this company's common stock included in its investment in
marketable securities balance of $13,920,000.  As of June 30, 2009, the Company
still holds notes and convertible notes of this company totaling approximately
$10,405,000, before impairment adjustments which includes $7,846,000 of
principal and $2,559,000 of accrued interest and penalties.


SUPPLEMENTAL DISCLOSURE ON RESTATEMENTS OF INTERIM QUARTERLY
CONSOLIDATED FINANCIAL STATEMENTS

As discussed in Note 3 to the Consolidated Financial Statements, the Company
has also restated its interim quarterly financial information for its two most
recent fiscal years ended June 30, 2009 and 2008. The consolidated statements
of operations for those periods were restated to reflect an accounting
treatment that required the Company to absorb 100% of the losses of the
Partnership rather than just the portion attributable to Portsmouth's 50%
limited partnership interest, due to the fact that there was accumulated
deficit in partners' equity at Justice. The effects of the restatements on the
previously reported consolidated balance sheets are the reduction in the
minority interest asset related to Justice Investors to zero and decrease in
retained earnings and minority interest related to Portsmouth and Santa Fe.
The effects of the restatements on the previously reported consolidated
statements of operations are the reduction in the minority interest related to
Justice Investors, pre-tax, to zero and decrease or increase in minority
interest related to Portsmouth and Santa Fe, which results in changes to
previously reported net income or loss. The restatements do not have an impact
on the previously reported revenues, operating expenses, income from
operations, other income (expense), or income tax provisions.

The following tables summarize the restatement adjustments on the Company's
previously reported consolidated statements of operations for the interim
quarterly periods for the Company's two most recent completed fiscal years
ended June 30, 2009 and 2008 as more described in Note 3.

                                    -29-
<PAGE>



<TABLE>

                                                  As Previously      Restatement
                                                    Reported          Adjustment      As Restated
                                                   (Unaudited)       (Unaudited)      (Unaudited)
                                                   ------------      ------------     -----------
<S>                                                <C>                <C>              <C>
For the three months ended March 31, 2009

Minority interest - Justice Investors, net of tax  $         -        $      -         $         -
Minority interest - net of tax                     $   640,000        $(134,000)       $   506,000
Net loss                                           $(1,260,000)       $(134,000)       $(1,394,000)


For the three months ended December 31, 2008

Minority interest - Justice Investors, net of tax  $         -        $      -         $         -
Minority interest - net of tax                     $   414,000        $(99,000)        $   315,000
Net loss                                           $  (615,000)       $(99,000)        $  (714,000)


For the three months ended September 30, 2008

Minority interest - Justice Investors, net of tax  $   (96,000)       $ 96,000         $         -
Minority interest - net of tax                     $   212,000        $(74,000)        $   138,000
Net income                                         $   649,000        $ 22,000         $   671,000


For the three months ended March 31, 2008

Minority interest - Justice Investors, net of tax  $   266,000        $(266,000)       $         -
Minority interest - net of tax                     $   697,000        $ (52,000)       $   645,000
Net loss                                           $(1,900,000)       $(318,000)       $(2,218,000)


For the three months ended December 31, 2007

Minority interest - Justice Investors, net of tax  $   257,000        $(257,000)       $         -
Minority interest - net of tax                     $   (68,000)       $ 124,000        $    56,000
Net income                                         $   347,000        $(133,000)       $   214,000


For the three months ended September 30, 2007

Minority interest - Justice Investors, net of tax  $   278,000        $(278,000)       $         -
Minority interest - net of tax                     $   409,000        $  27,000        $   436,000
Net income                                         $ 1,263,000        $(251,000)       $ 1,012,000

</TABLE>

FINANCIAL CONDITION AND LIQUIDITY

The Company's cash flows are primarily generated from the operations of Justice
Investors. The Company also receives revenues generated from its real estate
operations and from the investment of its cash and securities assets.  Since
the operations of the Hotel were temporarily suspended on May 31, 2005, and
significant amounts of money were expended to renovate and reposition the Hotel
as a Hilton, Justice did not pay any partnership distributions until the end of
March 2007. As a result, the Company had to depend more on the revenues
generated from the investment of its cash and marketable securities during that
transition period.

The Hotel started to generate cash flows from its operations in June 2006. For
the fiscal year ended June 30, 2009, Justice paid a total of $850,000 in
limited partnership distributions, of which the Company received $425,000. For
the fiscal year ended June 30, 2008, Justice paid a total of $1,450,000 in
limited partnership distributions, of which the Company received $725,000.
The fiscal 2009 distributions were paid in September 2008, after which the San
Francisco hotel market began to feel the full impact of the significant
downturn in domestic and international economies that continued throughout

                                    -30-
<PAGE>

fiscal 2009. Since no significant improvement in economic conditions is
expected in the lodging industry until sometime during the second half of
calendar 2010, no limited partnership distributions are anticipated in the
foreseeable future. The general partners will continue to monitor and review
the operations and financial results of the Hotel and to set the amount of any
future distributions that may be appropriate based on operating results, cash
flows and other factors, including establishment of reasonable reserves for
debt payments and operating contingencies.

The new Justice Compensation Agreement that became effective on December 1,
2008, when Portsmouth assumed the role of managing general partner of Justice,
has provided additional cash flows to the Company. Under the new Compensation
Agreement, Portsmouth is now entitled to 80% of the minimum base fee to be paid
to the general partners of $285,000, while under the prior agreement,
Portsmouth was entitled to receive only 20% of the minimum base fee. As a
result, total general partner fees paid to Portsmouth for the year ended June
30, 2009 increased to $222,000, compared to $180,000 for the year ended June
30, 2008.

To meet its substantial financial commitments for the renovation and transition
of the Hotel to a Hilton, Justice had to rely on borrowings to meet its
obligations. On July 27, 2005, Justice entered into a first mortgage loan with
The Prudential Insurance Company of America in a principal amount of
$30,000,000 (the "Prudential Loan").  The term of the Prudential Loan is for
120 months at a fixed interest rate of 5.22% per annum. The Prudential Loan
calls for monthly installments of principal and interest in the amount of
approximately $165,000, calculated on a 30-year amortization schedule. The Loan
is collateralized by a first deed of trust on the Partnership's Hotel property,
including all improvements and personal property thereon and an assignment of
all present and future leases and rents. The Prudential Loan is without
recourse to the limited and general partners of Justice. The principal balance
of the Prudential Loan was $28,242,000 as of June 30, 2009.

On March 27, 2007, Justice entered into a second mortgage loan with Prudential
(the "Second Prudential Loan") in a principal amount of $19,000,000. The term
of the Second Prudential Loan is for approximately 100 months and matures on
August 5, 2015, the same date as the first Prudential Loan. The Second
Prudential Loan is at a fixed interest rate of 6.42% per annum and calls for
monthly installments of principal and interest in the amount of approximately
$119,000, calculated on a 30-year amortization schedule. The Second Prudential
Loan is collateralized by a second deed of trust on the Partnership's Hotel
property, including all improvements and personal property thereon and an
assignment of all present and future leases and rents. The Second Prudential
Loan is also without recourse to the limited and general partners of Justice.
The principal balance of the Second Prudential Loan was $18,515,000 as of June
30, 2009.

Justice also has a $2,500,000 unsecured revolving line of credit facility from
United California Bank ("UCB") that can be used for short term business
requirements. The line of credit matures on February 2, 2010 and borrowings
bear interest at an annual interest rate based on the Wall Street Journal
Prime Rate plus 3%, floating, with an interest rate floor of 5%. As of June 30,
2009, there was a balance of $1,810,500 drawn by Justice under the line of
credit facility, with an annual interest rate of 6.25% (Prime at 3.25% as of
June 30, 2009, plus 3%). The Partnership was not incompliance with the
financial covenants as of June 30, 2009, but received a waiver of such non-
compliance from the bank on September 16, 2009.

                                    -31-
<PAGE>

Despite the downturns in the economy, the Hotel has continued to generate
positive cash flows. While the debt service requirements related to the two
Prudential loans, as well as the utilization of the UCB line of credit, may
create some additional risk for the Company and its ability to generate cash
flows in the future since the Partnership's assets had been virtually debt free
for an number of years, management believes that cash flows from the operations
of the Hotel and the garage will continue to be sufficient to meet all of the
Partnership's current and future obligations and financial requirements.
Management also believes that there is sufficient equity in the Hotel assets to
support future borrowings, if necessary, to fund any new capital improvements
and other requirements.

In March 2009, the Company refinanced its $1,054,000 loan on its corporate
office building and obtained a new loan in the amount of $1,200,000.  The
interest rate on the loan is fixed at 5.02% and the loan matures in March 2014.

In October 2008, the Company refinanced the mortgage on its 132-unit apartment
located in San Antonio, Texas and obtained a new mortgage loan in the amount of
$2,850,000.  The interest rate on the loan is fixed at 5.26% and the loan
matures in October 2011.  In December 2008, the Company modified this loan and
borrowed an additional $504,000.  As part of the loan modification, the fixed
interest rate was reduced to 5.0% with no change to the maturity date.

In July 2008, the Company modified the mortgage on its 264-unit apartment
complex located in St. Louis, Missouri and borrowed an additional $500,000 on
the note.  The term and the interest rate on the note remain the same.

During the year ended June 30, 2009, the Company improved real estate
properties in the aggregate amount of $443,000. Management believes the
improvements to the properties should enhance market values, maintain the
competitiveness of the Company's properties and potentially enable the Company
to obtain a higher yield through higher rents.

The Company's Board of Directors has given the Company the authority to
repurchase, from time to time, shares of its Common Stock.  Such repurchases
may be made at the discretion of management and depending upon market
conditions.  During the year ended June 30, 2009, the Company acquired 35,608
shares of its Common Stock for $413,000.  On June 3, 2009, the Board of
Directors authorized the Company to purchase up to an additional 125,000 shares
of Company's common stock.  Approximately 106,000 shares remain eligible for
the Company to repurchase as of June 30, 2009.

The Company has invested in short-term, income-producing instruments and in
equity and debt securities when deemed appropriate.  The Company's marketable
securities are classified as trading with unrealized gains and losses recorded
through the statement of operations.

Management believes that its cash, securities assets, and the cash flows
generated from those assets and from partnership distributions and management
fees, will be adequate to meet the Company's current and future obligations.

                                    -32-
<PAGE>



MATERIAL CONTRACTUAL OBLIGATIONS

The following table provides a summary of the Company's material financial
obligations with a reference to the Notes to the Consolidated Financial
Statements in which the financial obligations are discussed.

<TABLE>

                         Note
                         Ref.      Total        Year 1       Year 2       Year 3        Year 4      Year 5      Thereafter
                         ----   ------------   ----------   ----------   ----------   -----------   ----------   -----------
<S>                       <C>   <C>            <C>          <C>          <C>          <C>           <C>          <C>
Mortgage notes payable    11    $118,488,000   $2,132,000   $2,335,000   $5,561,000   $34,073,000   $3,338,000   $71,049,000
Line of credit            10       1,811,000    1,811,000            -            -             -            -             -
Other notes payable       12         830,000      651,000      179,000            -             -            -             -
Capital leases            12         500,000      243,000      243,000       14,000             -            -             -
Operating leases          13         646,000      165,000      165,000      165,000       151,000            -             -
                                 -----------    ---------    ---------    ---------    ----------    ---------    ----------
Total                           $122,275,000   $5,002,000   $2,922,000   $5,740,000   $34,224,000   $3,338,000   $71,049,000

</TABLE>

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no material off balance sheet arrangements.

IMPACT OF INFLATION

Hotel room rates are typically impacted by supply and demand factors, not
inflation, since rental of a hotel room is usually for a limited number of
nights.  Room rates can be, and usually are, adjusted to account for
inflationary cost increases.  Since Prism has the power and ability under the
terms of its management agreement to adjust hotel room rates on an ongoing
basis, there should be minimal impact on partnership revenues due to inflation.
Partnership revenues are also subject to interest rate risks, which may be
influenced by inflation.  For the two most recent fiscal years, the impact of
inflation on the Company's income is not viewed by management as material.

The Company's residential rental properties provide income from short-term
operating leases and no lease extends beyond one year.  Rental increases are
expected to offset anticipated increased property operating expenses.


CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are most significant to the
portrayal of our financial position and results of operations and require
judgments by management in order to make estimates about the effect of matters
that are inherently uncertain. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts in
our consolidated financial statements. We evaluate our estimates on an on-going
basis, including those related to the consolidation of our subsidiaries, to our
revenues, allowances for bad debts, accruals, asset impairments, other
investments, income taxes and commitments and contingencies. We base our
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities.
The actual results may differ from these estimates or our estimates may be
affected by different assumptions or conditions.


Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not required for smaller reporting companies.

                                    -33-
<PAGE>

Item 8.  Financial Statements and Supplementary Data


INDEX TO CONSOLIDATED FINANCIAL STATEMENT                          PAGE

Report of Independent Registered Public Accounting Firm             35

Consolidated Balance Sheets - June 30, 2009 and 2008 (Restated)     36

Consolidated Statements of Operations - For
  Years Ended June 30, 2009 and 2008 (Restated)                     37

Consolidated Statements of Shareholders' Equity - For
  Years Ended June 30, 2009 and 2008 (Restated)                     38

Consolidated Statements of Cash Flows - For
  Years Ended June 30, 2009 and 2008 (Restated)                     39

Notes to the Consolidated Financial Statements (Restated)           40 - 73

                                    -34-
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and
   Shareholders of The Intergroup Corporation:


We have audited the accompanying consolidated balance sheets of The Intergroup
Corporation and its subsidiaries (the Company) as of June 30, 2009 and 2008,
and the related consolidated statements of operations, shareholders' equity,
and cash flows for the years then ended. The Company's management is
responsible for these consolidated financial statements. Our responsibility is
to express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Intergroup
Corporation and its subsidiaries as of June 30, 2009 and 2008, and the results
of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.

As discussed in Note 3, the Company has restated its previously issued
consolidated financial statements to correct the errors in accounting for
minority interest.


/s/ Burr, Pilger & Mayer LLP

San Francisco, California
October 13, 2009

                                    -35-
<PAGE>

<TABLE>

                                  THE INTERGROUP CORPORATION
                                  CONSOLIDATED BALANCE SHEETS

  As of June 30,                                                        2009             2008
                                                                                      (As Restated
                                                                                         Note 3)
                                                                   ------------       ------------
                                      ASSETS
<S>                                                                <C>                <C>
Assets
  Investment in hotel, net                                         $ 44,791,000       $ 48,122,000
  Investment in real estate, net                                     63,028,000         65,296,000
  Properties held for sale                                            7,653,000          7,064,000
  Investment in marketable securities                                13,920,000          6,706,000
  Other investments, net                                              6,567,000          6,798,000
  Cash and cash equivalents                                           1,024,000          1,906,000
  Restricted cash                                                     1,598,000          1,653,000
  Other assets, net                                                   3,761,000          3,796,000
                                                                    -----------        -----------
    Total assets                                                   $142,342,000       $141,341,000
                                                                    ===========        ===========
                             LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
  Accounts payable and other liabilities                           $ 11,219,000       $ 10,462,000
  Due to securities broker                                            4,840,000          2,633,000
  Obligations for securities sold                                     2,105,000                  -
  Line of credit                                                      1,811,000          4,975,000
  Mortgage notes payable - hotel                                     46,757,000         47,482,000
  Mortgage notes payable - real estate                               61,061,000         61,433,000
  Mortgage notes payable - properties held for sale                  10,670,000         10,313,000
  Deferred income taxes                                               2,839,000          2,086,000
                                                                    -----------        -----------
    Total liabilities                                               141,302,000        139,384,000
                                                                    -----------        -----------

Minority interest                                                       975,000          1,611,000
                                                                    -----------        -----------
Commitments and contingencies

Shareholders' equity:
  Preferred stock, $.01 par value, 100,000 shares
   authorized; none issued                                                    -                  -
  Common stock, $.01 par value, 4,000,000 shares authorized;
   3,216,653 and 3,200,093 issued; 2,327,665 and 2,346,713
   Outstanding, respectively                                             32,000             32,000
  Additional paid-in capital                                          8,959,000          8,791,000
  Retained earnings                                                     638,000            674,000
  Treasury stock, at cost, 888,988 and 853,320 shares, respectively  (9,564,000)        (9,151,000)
                                                                    -----------        -----------
    Total shareholders' equity                                           65,000            346,000
                                                                    -----------        -----------
    Total liabilities and shareholders' equity                     $142,342,000       $141,341,000
                                                                    ===========        ===========

</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.

                                    -36-
<PAGE>
<TABLE>

                        THE INTERGROUP CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS


For the years ended June 30,                                2009            2008
                                                                       (As Restated
                                                                          Note 3)
                                                         -----------    -----------
<S>                                                     <C>            <C>
Revenues
 Hotel                                                  $ 32,821,000   $ 37,778,000
 Real estate                                              12,787,000     12,833,000
                                                         -----------    -----------
Total revenues                                            45,608,000     50,611,000
                                                         -----------    -----------
Costs and operating expenses
 Hotel operating expenses                                (27,331,000)   (31,870,000)
 Real estate operating expenses                           (6,337,000)    (6,296,000)
 Loss on termination of garage lease                        (684,000)             -
 Depreciation and amortization expense                    (6,777,000)    (6,905,000)
 General and administrative expense                       (1,663,000)    (1,817,000)
                                                         -----------    -----------
Total costs and operating expenses                       (42,792,000)   (46,888,000)
                                                         -----------    -----------
Income from operations                                     2,816,000      3,723,000
                                                         -----------    -----------
Other income(expense)
 Interest expense                                         (6,254,000)    (6,355,000)
 Net gain(loss) on marketable securities                   6,132,000     (1,561,000)
 Impairment loss on other investments                     (1,300,000)    (1,253,000)
 Dividend and interest income                                205,000        199,000
 Trading and margin interest expense                      (1,186,000)    (1,625,000)
                                                         -----------    -----------
Net other expense                                         (2,403,000)   (10,595,000)
                                                         -----------    -----------

Income(loss) before income tax and minority interest         413,000     (6,872,000)
Income tax (expense)benefit                                 (827,000)     2,005,000
                                                         -----------    -----------
Loss before minority interest                               (414,000)    (4,867,000)
Minority interest, net of tax                                627,000      1,213,000
                                                         -----------    -----------
Income(loss) from continuing operations                      213,000     (3,654,000)
                                                         -----------    -----------

Discontinued operations:
  Income from discontinued operations                        293,000        251,000
  Gain on sale of real estate                                      -      4,074,000
  Provision for income tax expense                          (117,000)    (1,708,000)
                                                         -----------    -----------
Income from discontinued operations                          176,000      2,617,000
                                                         -----------    -----------
Net income(loss)                                        $    389,000  $  (1,037,000)
                                                         ===========    ===========


Net income(loss) per share from continuing operations
  Basic and diluted                                     $       0.09  $       (1.55)
                                                         ===========    ===========
Net income per share from discontinued operations
  Basic and diluted                                     $       0.07  $        1.11
                                                         ===========    ===========
Net income(loss) per share
  Basic and diluted                                     $       0.16  $       (0.44)
                                                         ===========    ===========

Weighted average shares outstanding                        2,361,882      2,351,889
                                                         ===========    ===========

Diluted weighted average shares outstanding                2,372,665      2,351,889
                                                         ===========    ===========
</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.

                                    -37-
<PAGE>
<TABLE>

                               THE INTERGROUP CORPORATION
                        CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


                                           Additional
                                 Common     paid-in       Retained      Treasury
                       Shares     stock     capital       earnings       stock           Total
                    ----------   -------   ----------   -----------    -----------   -----------
<S>                  <C>         <C>       <C>          <C>            <C>           <C>
Balance at
 June 30, 2007
(As previously
 reported)           3,196,145   $32,000   $8,719,000   $ 5,758,000    $(9,052,000)  $ 5,457,000

Prior period
 adjustment                                              (3,322,000)                  (3,322,000)
                    ----------   -------   ----------   -----------    -----------   -----------
Balance at
 June 30, 2007       3,196,145    32,000    8,719,000     2,436,000    (9,052,000)     2,135,000
(As Restated)

Net loss                                                 (1,037,000)                  (1,037,000)

Distributions to
minority partners
of Justice                                                 (725,000)                    (725,000)

Issuance of stock        3,948                 72,000                                     72,000

Purchase of
 treasury stock                                                            (99,000)      (99,000)
                    ----------   -------   ----------   -----------    -----------   -----------
Balance at
 June 30, 2008
(As Restated)        3,200,093    32,000    8,791,000       674,000     (9,151,000)      346,000

Net loss                                                    389,000                      389,000

Distributions to
minority partners
of Justice                                                 (425,000)                    (425,000)


Issuance of stock        4,560                 72,000                                     72,000

Exercise of stock
 options                12,000                 96,000                                     96,000

Purchase of
 treasury stock                                                           (413,000)     (413,000)

                    ----------   -------   ----------   -----------    -----------   -----------
Balance at
 June 30, 2009       3,216,653   $32,000   $8,959,000   $   638,000    $(9,564,000)  $    65,000
                     =========   =======   ==========   ===========    ===========   ===========

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                    -38-
<PAGE>
<TABLE>

                         THE INTERGROUP COPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended June 30,                         2009          2008
                                                               (As Restated
                                                                  Note 3)
                                                 -----------    -----------
<S>                                              <C>           <C>
Cash flows from operating activities:
Net income(loss)                                 $   389,000   $ (1,037,000)
Adjustments to reconcile net income(loss)
 to cash provided by operating activities:
  Gain on sale of real estate                              -     (4,074,000)
  Depreciation and amortization                    6,777,000      6,905,000
  Net unrealized (gain)loss on investments        (4,942,000)     3,440,000
  Impairment loss on other investments             1,300,000      1,253,000
  Minority interest                                 (627,000)    (1,213,000)
  Loss on termination of garage lease                684,000              -
  Stock compensation expense                          72,000         72,000
  Changes in assets and liabilities:
   Other assets                                      171,000       (415,000)
   Investment in marketable securities            (2,272,000)     7,617,000
   Accounts payable and other liabilities            415,000     (2,065,000)
   Due to securities broker                        2,207,000     (5,502,000)
   Obligations for securities sold                 2,105,000     (1,485,000)
   Deferred taxes                                    753,000       (404,000)
                                                 -----------    ------------
Net cash provided by operating activities          7,032,000      3,092,000
                                                 -----------   ------------
Cash flows from investing activities:
  Investment in hotel                             (1,247,000)    (2,931,000)
  Investment in real estate                         (443,000)    (1,111,000)
  Net proceeds from sale of real estate                    -      7,739,000
  Investment in Other investments                 (1,069,000)    (2,757,000)
  Investment in Santa Fe                             (17,000)      (154,000)
  Investment in Portsmouth                           (12,000)      (216,000)
  Restricted cash                                     55,000      2,456,000
                                                 -----------    -----------
Net cash (used in)provided by investing
  activities                                      (2,733,000)     3,026,000
                                                 -----------    -----------
Cash flows from financing activities:
  Borrowings from mortgage notes payable           1,147,000     12,550,000
  Principal payments on mortgage notes payable    (1,887,000)   (18,943,000)
  Net (payments)draw on line of credit            (3,164,000)       717,000
  Net (payments) proceeds on notes payable          (535,000)       130,000
  Purchase of treasury stock                        (413,000)       (99,000)
  Distribution to minority partners                 (425,000)      (725,000)
  Proceeds from exercise of stock options             96,000              -
                                                 -----------    -----------
Net cash used in financing activities             (5,181,000)    (6,370,000)
                                                 -----------    -----------
Net decrease in cash and cash equivalents           (882,000)      (252,000)
Cash and cash equivalents at beginning of
 year                                              1,906,000      2,158,000
                                                 -----------    -----------
Cash and cash equivalents at end of year         $ 1,024,000   $  1,906,000
                                                 ===========    ===========
Supplemental information:

  Income tax paid                                $   162,000    $   193,000
                                                  ==========     ==========
  Interest paid                                  $ 7,077,000    $ 7,569,000
                                                  ==========     ==========
  Note payable issued under the installment
   sale agreement                                $   727,000              -
                                                  ==========     ==========
  Fixed assets acquired and note payable assumed
   under the installment sale agreement          $   (43,000)             -
                                                  ==========     ==========

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                    -39-
<PAGE>

                      THE INTERGROUP CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES:

Restatements

The consolidated financial statements of The InterGroup Corporation
("InterGroup" or the "Company") as of and for the fiscal year ended June 30,
2008 and the related financial information have been restated to correct
certain errors in the application of generally accepted accounting principles
("GAAP"). The nature of the corrections and the related effects on the
Company's previously issued consolidated financial statements are described in
Note 3. "Restatement of Consolidated Financial Statements". Restated balances
have been identified with the notation "restated" where appropriate. Throughout
these notes, the term "as previously reported" will be used to refer to
balances from the 2008 consolidated financial statements as reported prior to
the restatement for the correction of these errors. As set forth in Note 3, the
Company has also presented tables showing the impact of the restatement
adjustments on the Company's previously issued consolidated balance sheets and
consolidated statements of operations for each of the interim periods of the
Company's last two fiscal years ended June 30, 2009 and 2008.


Description of the Business

The InterGroup Corporation, a Delaware corporation, ("InterGroup" or the
"Company") was formed to buy, develop, operate and dispose of real property and
to engage in various investment activities to benefit the Company and its
shareholders.

As of June 30, 2009, the Company had the power to vote 80% of the voting shares
of Santa Fe Financial Corporation ("Santa Fe"), a public company (OTCBB: SFEF).
This percentage includes the power to vote an approximately 4% interest in the
common stock in Santa Fe owned by the Company's Chairman and President pursuant
to a voting trust agreement entered into on June 30, 1998.

Santa Fe's revenue is primarily generated through the management of its 68.8%
owned subsidiary, Portsmouth Square, Inc. ("Portsmouth"), a public company
(OTCBB: PRSI). InterGroup also directly owns approximately 11.7% of the common
stock of Portsmouth. Portsmouth has a 50.0% limited partnership interest in
Justice and serves as one of the two general partners. The other general
partner, Evon Corporation ("Evon"), serves as the managing general partner. As
discussed in Note 2, the financial statements of Justice are consolidated with
those of the Company, effective the fiscal year beginning July 1, 2006.

Justice owns a 544-room hotel property located at 750 Kearny Street, San
Francisco California, now known as the Hilton San Francisco Financial District
(the Hotel) and related facilities including a five level underground parking
garage. The Hotel is operated by the partnership as a full service Hilton brand
hotel pursuant to a Franchise License Agreement with Hilton Hotels Corporation.
Justice also has a Management Agreement with Prism Hospitality L.P. (Prism) to
perform the day-to-day management functions of the Hotel.

Justice leased the parking garage to Evon through September 30, 2008.
Effective October 1, 2008, Justice and Evon entered into an Installment Sale
Agreement whereby Justice purchased all of Evon's right, title, and interest in

                                    -40-
<PAGE>

the remaining term of its lease of the parking garage, which was to expire on
November 30, 2010, and other related assets.  Justice also agreed to assume
Evon's contract with Ace Parking Management, Inc. ("Ace Parking") for the
management of the garage and any other liabilities related to the operation of
the garage commencing October 1, 2008.  The Partnership also leases a day spa
on the lobby level to Tru Spa.

Due to the temporary closing of the Hotel to undergo major renovations from May
2005 until January 2006 to transition and reposition the Hotel from a Holiday
Inn to a Hilton, and the substantial depreciation and amortization expenses
resulting from the renovations and operating losses incurred as the Hotel
ramped up operations after reopening, Justice has recorded net losses. These
losses were anticipated and planned for as part of the Partnership's renovation
and repositioning plan for Hotel and management considers those net losses to
be temporary. The Hotel has been generating positive cash flows from operations
since June 2006 and net income is expected to improve in the future, especially
since depreciation and amortization expenses attributable to the renovation
will decrease substantially. Despite the significant downturn in the economy,
management believes that the revenues expected to be generated from the Hotel,
garage and the Partnership's leases will be sufficient to meet all of the
Partnership's current and future obligations and financial requirements.
Management also believes that there is significant equity in the Hotel to
support additional borrowings, if necessary.

In addition to the operations of the Hotel, the Company also generates income
from the ownership of real estate.  Properties include apartment complexes,
commercial real estate, and two single-family houses as strategic investments.
The properties are located throughout the United States, but are concentrated
in Texas and Southern California.  The Company also has investments in
unimproved real property.  The Company's residential rental properties located
in California are managed by a professional third party property management
company.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
all controlled subsidiaries. All significant inter-company transactions and
balances have been eliminated.

Investment in Hotel, Net

The Hotel property and equipment are stated at cost less accumulated
depreciation.  Building and improvements are being depreciated on a straight-
line basis over their estimated useful lives ranging from 5 to 39 years.
Furniture, fixtures and equipment are being depreciated on a straight-line
basis over their estimated useful lives ranging from 5 to 7 years.

Repairs and maintenance are charged to expense as incurred, and costs of
significant renewals and improvements are capitalized.  Costs of significant
renewals and improvements are capitalized and depreciated over the shorter of
its remaining estimated useful life or life of the asset.

In accordance with Statement of Financial Accounting Standards (SFAS) No. 144
"Accounting for Impairment or Disposal of Long-Lived Assets", the Company
reviews its investment in Hotel for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.  If expected future cash flows (undiscounted and excluding
interest costs) are less than the carrying value of the asset, the asset is

                                    -41
<PAGE>

written down to its estimated fair value.  The estimation of expected future
net cash flows is inherently uncertain and relies to a considerable extent on
assumptions regarding current and future economic and market conditions, and
the availability of capital. If, in future periods, there are changes in the
estimates or assumptions incorporated into the impairment review analysis, the
changes could result in an adjustment to the carrying amount of the long-lived
asset. No impairment losses on the investment in Hotel have been recorded for
the years ended June 30, 2009 and 2008.

Investment in Real Estate, Net

Rental properties are stated at cost less accumulated depreciation.
Depreciation of rental property is provided on the straight-line method based
upon estimated useful lives of 5 to 40 years for buildings and improvements and
5 to 10 years for equipment.  Expenditures for repairs and maintenance are
charged to expense as incurred and major improvements are capitalized.

In accordance with SFAS No. 144, the Company also reviews its rental property
assets for impairment.  No impairment losses on the investment in real estate
have been recorded for the years ended June 30, 2009 and 2008.

Investment in Marketable Securities

Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date.  Marketable
securities are classified as trading securities with all unrealized gains and
losses on the Company's investment portfolio recorded through the consolidated
statements of operations.

Other Investments, Net

Other investments in non-marketable securities are carried at cost net of any
impairment loss.  The Company has no significant influence or control over the
entities that issue these investments.  These investments are reviewed on a
periodic basis for other-than-temporary impairment. The Company reviews several
factors to determine whether a loss is other-than-temporary. These factors
include but are not limited to: (i) the length of time an investment is in an
unrealized loss position, (ii) the extent to which fair value is less than
cost, (iii) the financial condition and near term prospects of the issuer and
(iv) our ability to hold the investment for a period of time sufficient to
allow for any anticipated recovery in fair value.  For the years ended June 30,
2009 and 2008, the Company recorded impairment losses related to other
investments of $1,300,000 and $1,253,000, respectively.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with an original maturity
of three months or less when purchased and are carried at cost, which
approximates fair value.

Restricted Cash

Restricted cash is comprised of amounts held by lenders for payment of real
estate taxes, insurance, replacement reserves for the operating properties and
tenant security deposits that are invested in certificates of deposit.

                                    -42-
<PAGE>

Other Assets, Net

Other assets include accounts receivable from Hotel and rental property,
inventory, prepaid expenses, loan fees, license and franchise fees. Loan fees
are stated at cost and amortized over the term of the loan using the straight-
line method which approximates the effective interest method. Franchise fees
are stated at cost and amortized over the life of the agreement of 15 years.

Accounts receivable from the Hotel and rental property customers are carried at
cost less an allowance for doubtful accounts that is based on management's
assessment of the collectibility of accounts receivable.  The Company extends
unsecured credit to its customers but mitigates the associated credit risk by
performing ongoing credit evaluations of its customers.

Minority Interest

Minority interests in the net assets and earnings or losses of consolidated
subsidiaries are reflected in the caption "Minority interest" in the Company's
consolidated balance sheets and consolidated statements of operations. Minority
interest adjusts the Company's consolidated results of operations to reflect
only the Company's share of the earnings or losses of the consolidated
subsidiaries.

The minority interest in subsidiaries are reported under the liability section
in the consolidated balance sheets as of June 30, 2009 and 2008.

Due to Securities Broker

The Company may utilize margin for its marketable securities purchases through
the use of standard margin agreements with national brokerage firms.  Various
securities brokers have advanced funds to the Company for the purchase of
marketable securities under standard margin agreements. These advanced funds
are recorded as a liability.

Obligation for Securities Sold

Obligation for securities sold represents the fair market value of shares sold
with the promise to deliver that security at some future date and the fair
market value of shares underlying the written call options with the obligation
to deliver that security when and if the option is exercised.  The obligation
may be satisfied with current holdings of the same security or by subsequent
purchases of that security.  Unrealized gains and losses from changes in the
obligation are included in the statement of operations.

Accounts Payable and Other Liabilities

Accounts payable and other liabilities include trade payables, capital lease
obligations, advance deposits and other liabilities.

Treasury Stock

The Company records the acquisition of treasury stock under the cost method.

                                    -43-
<PAGE>

Fair Value of Financial Instruments

The recorded values of cash and cash equivalents, restricted cash, accounts
receivable, marketable securities, amounts due to securities brokers, accounts
payable and accrued expenses approximate their fair values based on their
short-term nature.  As of June 30, 2009, the recorded value of mortgage notes
payable approximates the fair value as the related interest rate is in line
with market rates.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"), which defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements.
SFAS No. 157 is effective as of the beginning of the Company's 2009 fiscal
year.  In February 2008, the FASB deferred the effective date of SFAS No. 157
for non-financial assets and liabilities that are recognized or disclosed at
fair value on a nonrecurring basis until the beginning of fiscal year 2010. The
Company adopted SFAS No. 157 with respect to financial assets and liabilities
on July 1, 2008.  There was no material effect on the financial statements upon
adoption of this new accounting pronouncement. The impact on the financial
statements from adoption of SFAS No. 157 as it pertains to non-financial assets
and liabilities has not yet been determined.

SFAS No. 157 discusses valuation techniques, such as the market approach
(comparable market prices), the income approach (present value of future income
or cash flow), and the cost approach (cost to replace the service capacity of
an asset or replacement cost). The statement utilizes a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value
into three broad levels:

Level 1:  Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities.

Level 2: Inputs, other than quoted prices that are observable for the asset or
liability, either directly or indirectly. These include quoted prices for
similar assets or liabilities in active markets and quoted prices for identical
or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the reporting entity's own
assumptions

The assets measured at fair value on a recurring basis as of June 30, 2009 are
as follows:

<TABLE>

Assets:                                 Level 1      Level 2        Level 3        June 30, 2009
-----------                            ---------    ---------      ---------     ------------------
<S>                                  <C>            <C>            <C>              <C>
Cash                                 $ 1,024,000           -              -         $ 1,024,000
Restricted cash                        1,598,000           -              -           1,598,000
Investment in marketable securities   13,920,000           -              -          13,920,000
                                      ----------    ---------      ---------         ----------
                                     $16,542,000           -              -         $16,542,000
                                      ==========    =========      =========         ==========
</TABLE>

The fair values of investments in marketable securities are determined by the
most recently traded price of each security at the balance sheet date.

Financial assets that are measured at fair value on a non-recurring basis and
are not included in the tables above include "Other investments in non-
marketable securities," that were initially measured at cost and have been

                                    -44-
<PAGE>

written down to fair value as a result of impairment. The following table shows
the fair value hierarchy for these assets measured at fair value on a non-
recurring basis as of June 30, 2009:

<TABLE>

                                                                                       Impairment loss for the
                                                                                              year ended
Assets:                           Level 1    Level 2      Level 3      June 30, 2009         June 30, 2009
-----------                      ---------  ---------    ---------   ------------------   ------------------
<S>                                     <C>        <C>  <C>            <C>                   <C>
Other non-marketable investments        -          -    $6,567,000     $6,567,000            $(1,300,000)

</TABLE>

Other investments in non-marketable securities are carried at cost net of any
impairment loss.  The Company has no significant influence or control over the
entities that issue these investments.  These investments are reviewed on a
periodic basis for other-than-temporary impairment. The Company reviews several
factors to determine whether a loss is other-than-temporary. These factors
include but are not limited to: (i) the length of time an investment is in an
unrealized loss position, (ii) the extent to which fair value is less than
cost, (iii) the financial condition and near term prospects of the issuer and
(iv) our ability to hold the investment for a period of time sufficient to
allow for any anticipated recovery in fair value.

Revenue Recognition

Room revenues are recognized on the date upon which a guest occupies a room and
or utilizes the Hotel's services.

Food and beverage revenues are recognized upon delivery. Garage revenues are
recognized when a guest uses the garage space.

Rental revenues from the garage and other are recognized on the straight-line
method of accounting under which contractual rent payment increases are
recognized evenly over the lease term, regardless of when the rent payments are
received by Justice.  The leases contain provisions for base rent plus a
percentage of the lessees' revenues, which are recognized when earned.

Revenue recognition from apartment rentals commences when an apartment unit is
placed in service and occupied by a rent-paying tenant.  Apartment units are
leased on a short-term basis, with no lease extending beyond one year.

Income Taxes

The provision for income tax expense or benefit differs from the amounts of
income taxes currently payable because certain items of income and expense
included in the consolidated financial statements are recognized in different
time periods by taxing authorities.  Deferred income taxes are determined using
the liability method. A deferred tax asset or liability is determined based on
the difference between the financial statement and tax basis of assets and
liabilities as measured by the enacted tax rates.  Deferred tax expense is the
result of changes in the amount of deferred income taxes during the period.
Deferred tax assets, including net operating loss and tax credit carry
forwards, are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that any portion of these tax attributes
will not be realized.  As of June 30, 2009 and 2008, the Company had valuation
allowance of $1,197,000 and $1,171,000, respectively, against the Company's
deferred tax assets.

From time to time, management must assess the need to accrue or disclose a
possible loss contingency for proposed adjustments from various federal, state
and foreign tax authorities that regularly audit the company in the normal
course of business. In making these assessments, management must often analyze
complex tax laws of multiple jurisdictions.

                                    -45-
<PAGE>

The Company adopted Financial Accounting Standards Board(FASB) Interpretation
No. 48(FIN 48), Accounting for Uncertainty in Income Taxes - an interpretation
of FASB Statement No. 109, effective July 1, 2007. FIN 48 clarifies the
accounting for uncertainty in tax positions. FIN 48 requires that the Company
recognize the impact of a tax position in the Company's financial statements if
that position is more likely than not of being sustained on audit, based on the
technical merits of the position. The adoption of FIN 48 did not have a
material impact on the Company's consolidated financial statements. The Company
recognizes interest and penalties related to uncertain income tax positions in
income tax expense.  There were no interest and penalties related to uncertain
income tax positions that were accrued as of June 30, 2009 and 2008 and during
the periods then ended. There were no changes in individual or aggregate
unrecognized tax positions.

Environmental Remediation Costs

Liabilities for environmental remediation costs are recorded and charged to
expense when it is probable that obligations have been incurred and the amounts
can be reasonably estimated.  Recoveries of such costs are recognized when
received.  As of June 30, 2009 and 2008, there were no liabilities for
environmental remediation.

Earnings Per Share

Basic income(loss) per share is computed by dividing net income(loss) available
to common stockholders by the weighted average number of common shares
outstanding.  The computation of diluted income(loss) per share is similar to
the computation of basic earnings per share except that the weighted-average
number of common shares is increased to include the number of additional common
shares that would have been outstanding if potential dilutive common shares had
been issued.  The Company's only potentially dilutive common shares are stock
options.  As of June 30, 2009, the Company had 45,000 stock options that were
considered potentially dilutive common shares and 57,000 stock options that
were considered anti-dilutive.  As of June 30, 2008, the Company had 373,500
stock options that were considered potentially dilutive common shares and
16,500 stock options that were considered anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America (GAAP) requires
the use of estimates and assumptions regarding certain types of assets,
liabilities, revenues, and expenses.  Such estimates primarily relate to
unsettled transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated amounts.

                                    -46-
<PAGE>

Reclassifications

Certain prior year balances have been reclassified to conform with the current
year presentation.

Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles.
SFAS No. 168 replaces SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS No. 168), and establishes the FASB Accounting
Standards Codification (Codification) as the source of authoritative GAAP in
the U.S. recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements.  SFAS No. 168 is effective for
financial statements issued for interim periods and annual periods ending after
September 15, 2009.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events." SFAS No. 165
defines subsequent events as events or transactions that occur after the
balance sheet date, but before the financial statements are issued. It defines
two types of subsequent events: recognized subsequent events, which provide
additional evidence about conditions that existed at the balance sheet date,
and non-recognized subsequent events, which provide evidence about conditions
that did not exist at the balance sheet date, but arose before the financial
statements were issued. Recognized subsequent events are required to be
recognized in the financial statements, and non-recognized subsequent events
are required to be disclosed. SFAS No. 165 requires entities to disclose the
date through which subsequent events have been evaluated, and the basis for
that date. SFAS 165 is consistent with current practice and did not have any
impact on the Company's consolidated financial statements. Subsequent events
were evaluated through October 13, 2009.

In April 2009, the Financial Accounting Standards Board (FASB) issued FASB
Staff Positions(FSPs) FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments.  These FSPs amend rules for other-than-
temporary impairments, provide for guidance on calculating fair values in
inactive and distressed markets and require quarterly fair value disclosures.
These FSPs are effective for interim and annual reporting periods ending after
June 15, 2009, with early adoptions permitted for periods ending after March
15, 2009.  The adoption of these FSPs did not have a material impact on the
Company's financial statements.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements, and amendment to Accounting Research
Bulletin (ARB) No. 51," (SFAS No. 160). This standard prescribes the accounting
by a parent company for minority interests held by other parties in a
subsidiary of the parent company. SFAS No. 160 is effective for the Company for
fiscal year ending June 30, 2010. The Company is currently assessing the impact
of SFAS No. 160 on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations" ("SFAS 141R"), which replaces SFAS No. 141. SFAS 141R establishes
principles and requirements for how an acquirer in a business combination
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any controlling interest; recognizes and
measures the goodwill acquired in the business combination or a gain from a
bargain purchase; and determines what information to disclose to enable users
of the financial statements to evaluate the nature and financial effects of the
business combination. SFAS 141R is to be applied prospectively to business

                                    -47-
<PAGE>

combinations for which the acquisition date is on or after an entity's fiscal
year that begins after December 15, 2008.  The provisions of SFAS 141R are
effective for the Company for the fiscal year ending June 30, 2010.  The
Company is currently assessing the impact of SFAS 141R on its financial
statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities-Including an Amendment of FASB
Statement No. 115." SFAS No. 159 provides entities with an irrevocable option
to report selected financial assets and financial liabilities at fair value. It
also establishes presentation and disclosure requirements that are designed to
facilitate comparisons between entities that choose different measurement
attributes for similar types of assets and liabilities. The Company adopted
SFAS No. 159 on July 1, 2008 and chose not to elect the fair value option for
its financial assets and liabilities that had not been previously carried at
fair value. Therefore, material financial assets and liabilities not carried at
fair value, such as other assets, accounts payable and other liabilities, line
of credit, and mortgage payables are reported at their carrying values.


NOTE 2 - JUSTICE INVESTORS

On July 14, 2005, the FASB issued Staff Position (FSP) SOP 78-9-1, "Interaction
of AICPA Statement of Position 78-9 and EITF Issue No. 04-5" to amend the
guidance in AICPA Statement of Position 78-9, "Accounting for Investments in
Real Estate Ventures" (SOP 78-9) to be consistent with the consensus in
Emerging Issues Task Force Issue No. 04-5 "Determining Whether a
General Partner, or General Partners as a Group, Controls a Limited Partnership
or Similar Entity When the Limited Partners Have Certain Rights" (Issue 04-5).
FSP SOP 78-9-1 eliminated the concept of "important rights" in paragraph .09 of
SOP 78-9 and replaces it with the concepts of "kick out rights" and
"substantive participating rights" as defined in Issue 04-5.  In accordance
with guidance set forth in FSP SOP 78-9-1, Portsmouth has applied the
principles of accounting applicable for investments in subsidiaries due to its
substantial limited partnership interest and general partnership rights and has
consolidated the financial statements of Justice with those of the Company
effective as of July 1, 2006.  For the year ended June 30, 2009 and 2008, the
results of operations for Justice were consolidated with those of the Company.

On December 1, 2008, Portsmouth and Evon, as the two general partners of
Justice, entered into a 2008 Amendment to the Limited Partnership Agreement
(the "Amendment") that provides for a change in the respective roles of the
general partners. Pursuant to the Amendment, Portsmouth will assume the role of
Managing General Partner and Evon will continue on as the Co-General Partner of
Justice.  The Amendment was ratified by approximately 98% of the limited
partnership interests. The Amendment also provides that future amendments to
the Limited Partnership Agreement may be made only upon the consent of the
general partners and at least seventy five percent (75%) of the interests of
the limited partners. Consent of at least 75% of the interests of the limited
partners will also be required to remove a general partner pursuant to the
Amendment.

Concurrent with the Amendment to the Limited Partnership Agreement, a new
General Partner Compensation Agreement (the "Compensation Agreement") was
entered into on December 1, 2008, among Justice, Portsmouth and Evon to
terminate and supersede all prior compensation agreement for the general
partners. Pursuant to the Compensation Agreement, the general partners of
Justice will be entitled to receive an amount equal to 1.5% of the gross annual
revenues of the Partnership (as defined), less $75,000 to be used as a
contribution toward the cost of Justice engaging an asset manager. In no event

                                    -48-
<PAGE>

shall the annual compensation be less than a minimum base of approximately
$285,000, with eighty percent (80%) of that amount being allocated to
Portsmouth for its services as managing general partner and twenty percent
(20%) allocated to Evon as the co-general partner. Compensation earned by the
general partners in each calendar year in excess of the minimum base, will be
payable in equal fifty percent (50%) shares to Portsmouth and Evon.


NOTE 3 - RESTATEMENTS OF CONSOLIDATED FINANCIAL STATEMENTS

The Company has restated its consolidated balance sheet as of June 30, 2008,
and the consolidated statements of operations, shareholders' equity and cash
flows for the year then ended. The restatements are made to correct errors in
the accounting for the minority interest in Justice Investors and the
attribution of Partnership losses as discussed below.

During 2004, the Partnership developed a business plan to terminate the lease
of its San Francisco Hotel and to reposition the Hotel from a Holiday Inn to a
full-service Hilton Hotel. Justice entered into a Franchise Agreement with
Hilton Hotels in December 2004 that required extensive renovations to the Hotel
before it could open as a Hilton. To make the necessary renovations, the Hotel
was temporarily closed from May 2005 until a "soft opening" in January 2006. It
was not until approximately June 2006, when the Hotel was able to fully ramp up
operations, that it began generating positive cash flows. The total
construction costs for the renovations were approximately $37 million. Due to
operating losses incurred during the temporary closure and the repositioning of
the Hotel to a Hilton, increased depreciation and amortization expenses
resulting from the significant renovations, as well as the accounting effect of
partnership distributions from prior years, Justice had an accumulated deficit
in its limited partners' capital accounts as of June 30, 2006.

Pursuant to the guidance set forth in FASB Accounting Research Bulletin (ARB)
No. 51, paragraph 15 "Consolidated Financial Statements-Minority Interests"
when cumulative losses applicable to the minority interest in a subsidiary
exceed the minority interest in the equity capital of the subsidiary, such
excess and any further losses applicable to the minority interest should be
charged against the majority interest.

There is an exception to the general accounting guidance set forth in Paragraph
15 of ARB No. 51 that provides as follows:

       "When cumulative losses applicable to minority interests exceed
        the minority's interests in the subsidiary's capital, the excess
        should be charged against the majority interest and should not be
        reflected as an asset, except in rare cases when the minority
        shareholders have a binding obligation to make good on such losses.
        Subsequent profits earned by a subsidiary under such circumstances
        that are applicable to the minority interests should be allocated
        to the majority interest to the extent minority losses have been
        previously absorbed."

In consolidating Justice, the Company relied on the above exception to the
general accounting guidance set forth in Paragraph 15 of ARB No. 51 based on
the following factors:

       * Evon, as the managing general partner of Justice, has a joint
         legal obligation under California law to make good on the
         losses of the Partnership should the assets of Justice be
         insufficient to meet those obligations.

                                    -49-
<PAGE>

       * There are provisions in the Justice limited partnership
         agreement that would require certain minority interest holders
         to contribute the amount of any deficit in their partnership
         accounts to the Partnership which shall distribute such sum
         among the limited partners in the proportion their profit and
         loss percentages bear to each other.

       * The losses and the deficit at Justice were considered
         to be temporary in nature since the Hotel had been cash
         flow positive since June 2006 and, based on projections
         from its management company and industry experts, was
         expected to generate significant net income in the next
         five years.

       * Based on appraisals and other market information, management
         believes that there is significant equity in the Hotel far
         in excess of the Partnership's debt and sufficient enough to
         reverse any partner's deficit on the books of Justice upon
         the sale of the Hotel.

Based on the above exception to the general accounting guidance and the other
supporting factors, the Company recorded a minority interest asset of Justice
Investors on its consolidated balance sheet for fiscal years ended June 30,
2008 and 2007. As of June 30, 2008, that minority interest asset was previously
reported as $6,793,000. During those fiscal years, the Company only recorded
its 50% share of the losses of Justice and attributed the balance of those
losses to the minority interest.

The Company has determined that its reliance on exception to the general
accounting guidance, and the assumptions made by management regarding the
temporary nature of the losses and deficit at Justice and the sufficiency of
the obligations of the minority interest holders to fund the accumulated
deficit at Justice Investors, were incorrect. Contrary to management's belief,
although the operations of the Hotel have been cash flow positive since June
30, 2006, the Partnership has continued to generate net losses and has not been
able to reverse the deficit in its partners' equity account. In fact, under the
current economic conditions, the Partnership deficit has continued to grow far
in excess of whatever obligations the minority interest holders might have to
fund that deficit. As a result, the Company has concluded that, pursuant to
Paragraph 15 of ARB 51, the Company should not have recorded a minority
interest asset of Justice on its balance sheets and should have absorbed 100%
of the losses of Justice in its consolidated statements of operations rather
than just the 50% attributable to its limited partnership interest.

The effects of the restatements on the consolidated balance sheets is it
reduces the minority interest asset related to Justice Investors to zero and
decreases the retained earnings and minority interest related to Santa Fe and
Portsmouth.  The effects of the restatements on the consolidated statement of
operations is it reduces the minority interest related to Justice Investors,
pre-tax to zero and decreases or increases minority interest related to Santa
Fe and Portsmouth. The restatements do not have an impact on the previously
reported revenues, operating expenses, income from operations, other income
(expense) or income tax provisions.

The following tables present the impact of the restatement adjustments on the
Company's previously reported consolidated balance sheet as of June 30, 2008
and the consolidated statement of operations for the year then ended.

                                    -50-
<PAGE>
<TABLE>

                                 CONSOLIDATED BALANCE SHEET
                                     AS OF JUNE 30, 2008

                                                        As Previously   Restatement        As
                                                          Reported      Adjustment      Restated
                                                        -----------     ----------    -----------
<S>                                                    <C>             <C>            <C>
Assets
  Investment in hotel, net                             $ 48,122,000    $         -    $48,122,000
  Investment in real estate                              65,296,000              -     65,296,000
  Properties held for sale                                7,064,000              -      7,064,000
  Investment in marketable securities                     6,706,000              -      6,706,000
  Other investments, net                                  6,798,000              -      6,798,000
  Cash and cash equivalents                               1,906,000              -      1,906,000
  Restricted cash                                         1,653,000              -      1,653,000
  Other assets, net                                       3,796,000              -      3,796,000
  Minority interest of Justice Investors                  6,793,000     (6,793,000)             -
                                                        -----------     ----------    -----------
Total assets                                           $148,134,000    $(6,793,000)  $141,341,000
                                                        ===========     ==========    ===========
Liabilities and Shareholders' Equity

Total liabilities                                      $139,384,000    $         -   $139,384,000
                                                        -----------     ----------    -----------
Minority interest                                         3,621,000     (2,010,000)     1,611,000
                                                        -----------     ----------    -----------
  Common stock                                               32,000              -         32,000
  Additional paid-in capital                              8,791,000              -      8,791,000
  Retained earnings                                       5,457,000     (4,783,000)       674,000
  Treasury stock                                         (9,151,000)             -     (9,151,000)
                                                        -----------     ----------    -----------
Total shareholders' equity                                5,129,000     (4,783,000)       346,000
                                                        -----------     ----------    -----------

Total liabilities and shareholders' equity             $148,134,000    $(6,793,000)  $148,134,000
                                                        ===========     ==========    ===========
</TABLE>
<TABLE>

                            CONSOLIDATED STATEMENT OF OPERATIONS
                              FOR THE YEAR ENDED JUNE 30, 2008

                                                 As Previously     Restatement             As
                                                   Reported        Adjustment           Restated
                                                  ----------       ----------          ----------
<S>                                              <C>              <C>                 <C>
Revenues                                         $50,611,000      $         -         $50,611,000
Total costs and operating expenses               (46,888,000)               -         (46,888,000)
                                                  ----------       ----------          ----------
Income from operations                             3,723,000                -           3,723,000
Net other expense                                (10,595,000)               -         (10,595,000)
                                                  ----------       ----------          ----------

Loss before income taxes and minority interest    (6,872,000)               -          (6,872,000)
Minority interest - Justice Investors, pre-tax       802,000         (802,000)                  -
                                                  ----------       ----------          ----------
Loss before income taxes and minority interest    (6,070,000)        (802,000)         (6,872,000)
Income tax benefit                                 2,005,000                -           2,005,000
                                                  ----------       ----------          ----------
Loss before minority interest                     (4,065,000)        (802,000)         (4,867,000)
Minority interest, net of tax                      1,147,000           66,000           1,213,000
                                                  ----------       ----------          ----------
Net loss from continuing operations               (2,918,000)        (736,000)         (3,654,000)
Income from discontinued operations                2,617,000                -           2,617,000
                                                  ----------       ----------          ----------
Net loss                                         $  (301,000)     $  (736,000)        $(1,037,000)
                                                  ==========       ==========          ==========

Basic and diluted loss per share                 $     (0.13)     $     (0.31)              (0.44)
                                                  ==========       ==========          ==========
Weighted average number of common shares
  outstanding                                      2,350,591        2,350,591           2,350,591
                                                  ==========       ==========          ==========
</TABLE>

                                    -51-
<PAGE>

The following tables present the impact of the restatement adjustments
described above on the Company's previously reported balance sheets and
consolidated statements of operations for the interim quarterly periods for the
Company's two most recent completed fiscal years ended June 30, 2009 and 2008.

<TABLE>

                               CONDENSED CONSOLIDATED BALANCE SHEET
                                 AS OF MARCH 31, 2009 (UNAUDITED)

                                                        As Previously   Restatement        As
                                                          Reported      Adjustment      Restated
                                                        -----------     ----------    -----------
<S>                                                    <C>             <C>            <C>
Assets
  Investment in hotel, net                             $ 45,880,000    $         -    $45,880,000
  Investment in real estate                              64,040,000              -     64,040,000
  Properties held for sale                                7,123,000              -      7,123,000
  Investment in marketable securities                     5,151,000              -      5,151,000
  Other investments, net                                  6,320,000              -      6,320,000
  Cash and cash equivalents                               1,378,000              -      1,378,000
  Restricted cash                                         1,173,000              -      1,173,000
  Other assets, net                                       4,026,000              -      4,026,000
  Minority interest of Justice Investors                  7,122,000     (7,122,000)             -
                                                        -----------     ----------    -----------
Total assets                                           $142,213,000    $(7,122,000)  $135,091,000
                                                        ===========     ==========    ===========
Liabilities and Shareholders' Equity(Deficit)

Total liabilities                                      $135,602,000    $         -   $135,602,000
                                                        -----------     ----------    -----------
Minority interest                                         2,615,000     (1,968,000)       647,000
                                                        -----------     ----------    -----------
  Common stock                                               32,000              -         32,000
  Additional paid-in capital                              8,959,000              -      8,959,000
  Retained earnings                                       4,231,000     (5,154,000)      (923,000)
  Treasury stock                                         (9,226,000)             -     (9,226,000)
                                                        -----------     ----------    -----------
Total shareholders' equity(deficit)                       3,996,000     (5,154,000)    (1,158,000)
                                                        -----------     ----------    -----------

Total liabilities and shareholders' equity(deficit)    $142,213,000    $(7,122,000)  $135,091,000
                                                        ===========     ==========    ===========
</TABLE>
<TABLE>

                       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED MARCH 31, 2009 (UNAUDITED)

                                                 As Previously     Restatement             As
                                                   Reported        Adjustment           Restated
                                                  ----------       ----------          ----------
<S>                                              <C>              <C>                 <C>
Revenues                                         $10,214,000      $         -         $10,214,000
Total costs and operating expenses               (10,567,000)               -         (10,567,000)
                                                  ----------       ----------          ----------
Loss from operations                                (353,000)               -            (353,000)
Net other expense                                 (2,304,000)               -          (2,304,000)
                                                  ----------       ----------          ----------
Loss before income taxes and minority interest    (2,657,000)               -          (2,657,000)
Minority interest - Justice Investors, pre-tax             -                -                   -
                                                  ----------       ----------          ----------
Loss before income taxes and minority interest    (2,657,000)               -          (2,657,000)
Income tax benefit                                   691,000                -             691,000
                                                  ----------       ----------          ----------
Loss before minority interest                     (1,966,000)               -          (1,966,000)
Minority interest, net of tax                        640,000         (134,000)            506,000
                                                  ----------       ----------          ----------
Net loss from continuing operations               (1,326,000)        (134,000)         (1,460,000)
Income from discontinued operations                   66,000                -              66,000
                                                  ----------       ----------          ----------
Net loss                                         $(1,260,000)     $  (134,000)        $(1,394,000)
                                                  ==========       ==========          ==========

Basic and diluted loss per share                 $     (0.53)     $     (0.06)              (0.59)
                                                  ==========       ==========          ==========
Weighted average number of common shares
  outstanding                                      2,355,910        2,355,910           2,355,910
                                                   =========       ==========          ==========
</TABLE>
                                    -52-
<PAGE>
<TABLE>

                                 CONDENSED CONSOLIDATED BALANCE SHEET
                                  AS OF DECEMBER 31, 2008 (UNAUDITED)

                                                        As Previously   Restatement        As
                                                          Reported      Adjustment      Restated
                                                        -----------     ----------    -----------
<S>                                                    <C>             <C>            <C>
Assets
  Investment in hotel, net                             $ 46,800,000    $         -    $46,800,000
  Investment in real estate                              64,468,000              -     64,468,000
  Properties held for sale                                7,110,000              -      7,110,000
  Investment in marketable securities                     6,741,000              -      6,741,000
  Other investments, net                                  7,056,000              -      7,056,000
  Cash and cash equivalents                                 583,000              -        583,000
  Restricted cash                                         1,814,000              -      1,814,000
  Other assets, net                                       4,389,000              -      4,389,000
  Minority interest of Justice Investors                  7,122,000     (7,122,000)             -
                                                        -----------     ----------    -----------
Total assets                                           $146,083,000    $(7,122,000)  $138,961,000
                                                        ===========     ==========    ===========
Liabilities and Shareholders' Equity

Total liabilities                                      $137,622,000    $         -   $137,622,000
                                                        -----------     ----------    -----------
Minority interest                                         3,130,000     (1,979,000)     1,151,000
                                                        -----------     ----------    -----------
  Common stock                                               32,000              -         32,000
  Additional paid-in capital                              8,959,000              -      8,959,000
  Retained earnings                                       5,491,000     (5,143,000)       348,000
  Treasury stock                                         (9,151,000)             -     (9,151,000)
                                                        -----------     ----------    -----------
Total shareholders' equity                                5,331,000     (5,143,000)       188,000
                                                        -----------     ----------    -----------

Total liabilities and shareholders' equity             $146,083,000    $(7,122,000)  $138,961,000
                                                        ===========     ==========    ===========
</TABLE>
<TABLE>


                      CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED DECEMBER 31, 2008 (UNAUDITED)

                                                 As Previously     Restatement             As
                                                   Reported        Adjustment           Restated
                                                  ----------       ----------          ----------
<S>                                              <C>              <C>                 <C>
Revenues                                         $11,824,000      $         -         $11,824,000
Total costs and operating expenses               (12,318,000)               -         (12,318,000)
                                                  ----------       ----------          ----------
Loss from operations                               (494,000)               -            (494,000)
Net other expense                                   (842,000)               -            (842,000)
                                                  ----------       ----------          ----------
Loss before income taxes and minority interest    (1,336,000)               -          (1,336,000)
Income tax benefit                                   276,000                -             276,000
                                                  ----------       ----------          ----------
Loss before minority interest                     (1,060,000)               -          (1,060,000)
Minority interest, net of tax                        414,000          (99,000)            315,000
                                                  ----------       ----------          ----------
Net loss from continuing operations                 (646,000)         (99,000)           (745,000)
Income from discontinued operations                   31,000                -              31,000
                                                  ----------       ----------          ----------
Net loss                                         $  (615,000)     $   (99,000)        $  (714,000)
                                                  ==========       ==========          ==========

Basic and diluted loss per share                 $     (0.26)     $     (0.04)              (0.30)
                                                  ==========       ==========          ==========
Weighted average number of common shares
  outstanding                                      2,354,403        2,354,403           2,354,403
                                                  =========       ==========          ==========

</TABLE>
                                    -53-
<PAGE>
<TABLE>

                             CONDENSED CONSOLIDATED BALANCE SHEET
                              AS OF SEPTEMBER 30, 2008 (UNAUDITED)

                                                        As Previously   Restatement        As
                                                          Reported      Adjustment      Restated
                                                        -----------     ----------    -----------
<S>                                                    <S>             <C>            <C>
Assets
  Investment in hotel, net                             $ 47,446,000    $         -    $47,446,000
  Investment in real estate                              64,911,000              -     64,911,000
  Properties held for sale                                7,066,000              -      7,066,000
  Investment in marketable securities                     4,969,000              -      4,969,000
  Other investments, net                                  6,556,000              -      6,556,000
  Cash and cash equivalents                               1,127,000              -      1,127,000
  Restricted cash                                         1,711,000              -      1,711,000
  Other assets, net                                       4,012,000              -      4,012,000
  Minority interest of Justice Investors                  7,122,000     (7,122,000)             -
                                                        -----------     ----------    -----------
Total assets                                           $144,920,000    $(7,122,000)  $137,798,000
                                                        ===========     ==========    ===========
Liabilities and Shareholders' Equity

Total liabilities                                      $135,621,000    $         -   $135,621,000
                                                        -----------     ----------    -----------
Minority interest                                         3,449,000     (1,984,000)     1,465,000
                                                        -----------     ----------    -----------
  Common stock                                               32,000              -         32,000
  Additional paid-in capital                              8,863,000              -      8,863,000
  Retained earnings                                       6,106,000     (5,138,000)       968,000
  Treasury stock                                         (9,151,000)             -     (9,151,000)
                                                        -----------     ----------    -----------
Total shareholders' equity                                5,850,000     (5,138,000)       712,000
                                                        -----------     ----------    -----------

Total liabilities and shareholders' equity             $144,920,000    $(7,122,000)  $137,798,000
                                                        ===========     ==========    ===========
</TABLE>
<TABLE>


                       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 (UNAUDITED)

                                                 As Previously     Restatement             As
                                                   Reported        Adjustment           Restated
                                                  ----------       ----------          ----------
<S>                                              <C>              <C>                 <C>
Revenues                                         $12,525,000      $         -         $12,525,000
Total costs and operating expenses               (10,958,000)               -         (10,958,000)
                                                  ----------       ----------          ----------
Income from operations                             1,567,000                -           1,567,000
Net other expense                                   (809,000)               -            (809,000)
                                                  ----------       ----------          ----------

Income before income taxes and minority interest     758,000                -             758,000
Minority interest - Justice Investors, pre-tax       (96,000)          96,000                   -
                                                  ----------       ----------          ----------
Income before income taxes and minority interest     662,000           96,000             758,000
Income tax benefit                                  (275,000)               -            (275,000)
                                                  ----------       ----------          ----------
Income before minority interest                      387,000                -             483,000
Minority interest, net of tax                        212,000          (74,000)            138,000
                                                  ----------       ----------          ----------
Net income from continuing operations                599,000           22,000             621,000
                                                  ----------       ----------          ----------
Income from discontinued operations                   50,000                -              50,000
Net income                                       $   649,000      $    22,000         $   671,000
                                                  ==========       ==========          ==========

Basic and diluted income per share               $      0.28      $      0.01                0.29
                                                  ==========       ==========          ==========
Weighted average number of common shares
  outstanding                                      2,347,853        2,347,853           2,347,853
                                                  ==========       ==========          ==========

</TABLE>
                                    -54-
<PAGE>
<TABLE>
                            CONDENSED CONSOLIDATED BALANCE SHEET
                              AS OF MARCH 31, 2008 (UNAUDITED)

                                                        As Previously   Restatement        As
                                                          Reported      Adjustment      Restated
                                                        -----------     ----------    -----------
<S>                                                    <C>             <C>            <C>
Assets
  Investment in hotel, net                             $ 48,653,000    $         -    $48,653,000
  Investment in real estate                              65,634,000              -     65,634,000
  Properties held for sale                                7,037,000              -      7,037,000
  Investment in marketable securities                     6,886,000              -      6,886,000
  Other investments, net                                  6,745,000              -      6,745,000
  Cash and cash equivalents                                 647,000              -        647,000
  Restricted cash                                         1,283,000              -      1,283,000
  Other assets, net                                       4,054,000              -      4,054,000
  Minority interest of Justice Investors                  6,567,000     (6,567,000)             -
                                                        -----------     ----------    -----------
Total assets                                           $147,506,000    $(6,567,000)  $140,939,000
                                                        ===========     ==========    ===========
Liabilities and Shareholders' Equity

Total liabilities                                      $138,536,000    $         -   $138,536,000
                                                        -----------     ----------    -----------
Minority interest                                         3,830,000     (2,067,000)     1,763,000
                                                        -----------     ----------    -----------
  Common stock                                               21,000              -         21,000
  Additional paid-in capital                              8,802,000              -      8,802,000
  Retained earnings                                       5,468,000     (4,500,000)       968,000
  Treasury stock                                         (9,151,000)             -     (9,151,000)
                                                        -----------     ----------    -----------
Total shareholders' equity                                5,140,000     (4,500,000)       640,000
                                                        -----------     ----------    -----------

Total liabilities and shareholders' equity             $147,506,000    $(6,567,000)  $140,939,000
                                                        ===========     ==========    ===========
</TABLE>
<TABLE>


                    CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                  FOR THE THREE MONTHS ENDED MARCH 31, 2008 (UNAUDITED)

                                                 As Previously     Restatement             As
                                                   Reported        Adjustment           Restated
                                                  ----------       ----------          ----------
<S>                                              <C>              <C>                 <C>
Revenues                                         $12,117,000      $         -         $12,117,000
Total costs and operating expenses               (11,864,000)               -         (11,864,000)
                                                  ----------       ----------          ----------
Income from operations                               253,000                -             253,000
Net other expense                                 (4,910,000)               -          (4,910,000)
                                                  ----------       ----------          ----------

Loss before income taxes and minority interest    (4,657,000)               -          (4,657,000)
Minority interest - Justice Investors, pre-tax       266,000         (266,000)                  -
                                                  ----------       ----------          ----------
Loss before income taxes and minority interest    (4,391,000)        (266,000)         (4,657,000)
Income tax benefit                                 1,726,000                -           1,726,000
                                                  ----------       ----------          ----------
Loss before minority interest                     (2,665,000)               -          (2,931,000)
Minority interest, net of tax                        697,000          (52,000)            645,000
                                                  ----------       ----------          ----------
Net loss from continuing operations               (1,968,000)        (318,000)         (2,286,000)
Income from discontinued operations                   68,000                -              68,000
                                                  ----------       ----------          ----------
Net loss                                         $(1,900,000)     $  (318,000)        $(2,218,000)
                                                  ==========       ==========          ==========

Basic and diluted loss per share                 $     (0.81)     $     (0.13)              (0.94)
                                                  ==========       ==========          ==========
Weighted average number of common shares
  outstanding                                      2,350,916        2,350,916           2,350,916
                                                  =========       ==========          ==========
</TABLE>
                                      -55-
<PAGE>
<TABLE>

                             CONDENSED CONSOLIDATED BALANCE SHEET
                              AS OF DECEMBER 31, 2007 (UNAUDITED)

                                                        As Previously   Restatement        As
                                                          Reported      Adjustment      Restated
                                                        -----------     ----------    -----------
<S>                                                    <C>             <C>            <C>
Assets
  Investment in hotel, net                             $ 49,257,000    $         -    $49,257,000
  Investment in real estate                              67,887,000              -     67,887,000
  Properties held for sale                                5,231,000              -      5,231,000
  Investment in marketable securities                    15,233,000              -     15,233,000
  Other investments, net                                  7,394,000              -      7,394,000
  Cash and cash equivalents                                 550,000              -        550,000
  Restricted cash                                         1,649,000              -      1,649,000
  Other assets, net                                       4,111,000              -      4,111,000
  Minority interest of Justice Investors                  6,301,000     (6,301,000)             -
                                                        -----------     ----------    -----------
Total assets                                           $157,613,000    $(6,301,000)  $151,312,000
                                                        ===========     ==========    ===========
Liabilities and Shareholders' Equity

Total liabilities                                      $146,100,000    $         -   $146,100,000
                                                        -----------     ----------    -----------
Minority interest                                         4,376,000     (1,968,000)     2,408,000
                                                        ----------      ----------    -----------
  Common stock                                               21,000              -         21,000
  Additional paid-in capital                              8,802,000              -      8,802,000
  Retained earnings                                       7,368,000     (4,333,000)     3,035,000
  Treasury stock                                         (9,054,000)             -     (9,054,000)
                                                        -----------     ----------    -----------
Total shareholders' equity                                7,137,000     (4,333,000)     2,804,000
                                                        -----------     ----------    -----------

Total liabilities and shareholders' equity             $157,613,000    $(6,301,000)  $151,312,000
                                                        ===========     ==========    ===========

</TABLE>
<TABLE>

                     CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                 FOR THE THREE MONTHS ENDED DECEMBER 31, 2007 (UNAUDITED)

                                                 As Previously     Restatement             As
                                                   Reported        Adjustment           Restated
                                                  ----------       ----------          ----------
<S>                                              <C>              <C>                 <C>
Revenues                                         $12,938,000      $         -         $12,938,000
Total costs and operating expenses               (13,221,000)               -         (13,221,000)
                                                  ----------       ----------          ----------
Loss from operations                                (283,000)               -            (283,000)
Net other expense                                    564,000                -             564,000
                                                  ----------       ----------          ----------

Income before income taxes and minority interest     281,000                -             281,000
Minority interest - Justice Investors, pre-tax       257,000         (257,000)                  -
                                                  ----------       ----------          ----------
Income before income taxes and minority interest     538,000         (257,000)            281,000
Income tax benefit                                  (182,000)               -            (182,000)
                                                  ----------       ----------          ----------
Income before minority interest                      356,000                -              99,000
Minority interest, net of tax                        (68,000)         124,000              56,000
                                                  ----------       ----------          ----------
Net income from continuing operations                288,000         (133,000)            155,000
Income from discontinued operations                   59,000                -              59,000
                                                  ----------       ----------          ----------
Net income                                       $   347,000      $  (133,000)        $   214,000
                                                  ==========       ==========          ==========

Basic and diluted income per share               $      0.15      $     (0.06)               0.09
                                                  ==========       ==========          ==========
Weighted average number of common shares
  outstanding                                      2,352,395        2,352,395           2,352,395
                                                  ==========       ==========           ==========

</TABLE>
                                    -56-
<PAGE>
<TABLE>

                         CONDENSED CONSOLIDATED BALANCE SHEET
                         AS OF SEPTEMBER 30, 2007 (UNAUDITED)

                                                        As Previously   Restatement        As
                                                          Reported      Adjustment      Restated
                                                        -----------     ----------    -----------
<S>                                                    <C>             <C>            <C>
Assets
  Investment in hotel, net                             $ 49,415,000    $         -    $49,415,000
  Investment in real estate                              73,509,000              -     73,509,000
  Investment in marketable securities                     9,128,000              -      9,128,000
  Other investments, net                                  5,294,000              -      5,294,000
  Cash and cash equivalents                               1,262,000              -      1,262,000
  Restricted cash                                         3,355,000              -      3,355,000
  Other assets, net                                       3,829,000              -      3,829,000
  Minority interest of Justice Investors                  5,545,000     (5,545,000)             -
                                                        -----------     ----------    -----------
Total assets                                           $151,337,000    $(5,545,000)  $145,792,000
                                                        ===========     ==========    ===========
Liabilities and Shareholders' Equity

Total liabilities                                      $140,167,000    $         -   $140,167,000
                                                        -----------     ----------    -----------
Minority interest                                         4,378,000     (1,889,000)     2,489,000
                                                         ----------     ----------    -----------
  Common stock                                               21,000              -         21,000
  Additional paid-in capital                              8,802,000              -      8,802,000
  Retained earnings                                       7,021,000     (3,656,000)     3,365,000
  Treasury stock                                         (9,052,000)             -     (9,052,000)
                                                        -----------     ----------    -----------
Total shareholders' equity                                6,792,000     (3,656,000)     3,136,000
                                                        -----------     ----------    -----------

Total liabilities and shareholders' equity             $151,337,000    $(5,545,000)  $145,792,000
                                                        ===========     ==========    ===========
</TABLE>
<TABLE>

                   CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
              FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007 (UNAUDITED)

                                                 As Previously     Restatement             As
                                                   Reported        Adjustment           Restated
                                                  ----------       ----------          ----------
<S>                                              <C>              <C>                 <C>
Revenues                                         $13,414,000      $         -         $13,414,000
Total costs and operating expenses               (13,139,000)               -         (13,139,000)
                                                  ----------       ----------          ----------
Income from operations                               275,000                -             275,000
Net other expense                                 (3,153,000)               -          (3,153,000)
                                                  ----------       ----------          ----------

Loss before income taxes and minority interest    (2,878,000)               -          (2,878,000)
Minority interest - Justice Investors, pre-tax       278,000         (278,000)                  -
                                                  ----------       ----------          ----------
Loss before income taxes and minority interest    (2,600,000)        (278,000)         (2,878,000)
Income tax benefit                                 1,095,000                -           1,095,000
                                                  ----------       ----------          ----------
Loss before minority interest                     (1,505,000)               -          (1,783,000)
Minority interest, net of tax                        409,000           27,000             436,000
                                                  ----------       ----------          ----------
Net loss from continuing operations               (1,096,000)        (251,000)         (1,347,000)
Income from discontinued operations                2,359,000                -           2,359,000
                                                  ----------       ----------          ----------
Net income                                       $ 1,263,000      $  (251,000)        $ 1,012,000
                                                  ==========       ==========          ==========

Basic and diluted income per share               $      0.54      $     (0.11)               0.43
                                                  ==========       ==========          ==========
Weighted average number of common shares
  outstanding                                      2,352,335        2,352,335           2,352,335
                                                  ==========       ==========          ==========

</TABLE>
                                    -57-
<PAGE>

NOTE 4 - INVESTMENT IN HOTEL, NET

Property and equipment consisted of the following as of:


June 30, 2009                                Accumulated       Net Book
                               Cost          Depreciation        Value
                          ------------       ------------     ------------
Land                      $  2,738,000       $          -     $  2,738,000
Furniture and equipment     16,939,000        (11,262,000)       5,677,000
Building and improvements   54,266,000        (17,890,000)      36,376,000
                          ------------       ------------     ------------
                          $ 73,943,000       $(29,152,000)    $ 44,791,000
                          ============       ============     ============

June 30, 2008                                Accumulated       Net Book
                               Cost          Depreciation        Value
                          ------------       ------------     ------------
Land                      $  2,738,000       $          -     $  2,738,000
Furniture and equipment     16,279,000         (8,005,000)       8,274,000
Building and improvements   53,486,000        (16,376,000)      37,110,000
                          ------------       ------------     ------------
                          $ 72,503,000       $(24,381,000)    $ 48,122,000
                          ============       ============     ============

Depreciation expense for the years ended June 30, 2009 and 2008 was $4,600,000
and $4,606,000, respectively.

The Partnership leases certain equipment under agreements that are classified
as capital leases. The cost of equipment under capital leases was $959,000 as
of June 30, 2009 and 2008. The accumulated amortization on capital leases was
$670,000 and $478,000 as of June 30, 2009 and 2008, respectively.


NOTE 5 - INVESTMENT IN REAL ESTATE, NET

At June 30, 2009, the Company's investment in real estate consisted of twenty-
four properties located throughout the United States.  These properties include
eighteen apartment complexes, two single-family houses as strategic
investments, and two commercial real estate properties, one of which serves as
the Company's corporate headquarters.  The Company also owns two unimproved
real estate properties located in Austin, Texas and Maui, Hawaii.

Investment in real estate included the following:

  As of June 30,                                2009          2008
                                             ----------    ----------
  Land                                    $  24,735,000  $ 24,735,000
  Buildings, improvements and equipment      61,149,000    60,778,000
  Less: accumulated depreciation            (22,856,000)  (20,217,000)
                                             ----------    ----------
                                          $  63,028,000    65,296,000
                                             ==========    ==========

Depreciation expense from continuing operations for the years ended June 30,
2009 and 2008, was $2,122,000 and $2,245,000, respectively.

                                    -58-
<PAGE>

NOTE 6 - PROPERTIES HELD FOR SALE AND DISCONTINUED OPERATIONS

As of June 30, 2009, the Company had two properties located in Texas classified
as held for sale.   The revenues and expenses from the operation for these
properties along with the properties that were sold and/or listed as held for
sale for the years ended June 30, 2009 and 2008, respectively, have been
reclassified from continuing operations and reported as income from
discontinued operations in the consolidated statements of operations for the
respective years.

In August 2007, the Company sold its 224-unit apartment complex located in
Irving, Texas for $8,050,000 and recognized a gain on the sale of real estate
of $4,074,000 which is included in discontinued operations.  This property was
classified as property held for sale on the consolidated balance sheet as of
June 30, 2007.  The Company received net proceeds after selling costs of
$7,739,000 and paid off the related outstanding mortgage note payable of
$4,007,000.  The revenues and expenses from the operation of this property for
the year ended June 30, 2008 have been classified as income from discontinued
operations in the consolidated statements of operations.

Revenues and expenses from the operation of these properties for the years
ended June 30, 2009 and 2008 are summarized as follows:

<TABLE>

     For the years ended June 30,                     2009               2008
                                                   ----------        ----------
      <S>                                         <C>               <C>
      Revenues                                    $ 2,608,000       $ 2,823,000
      Expenses                                     (2,315,000)       (2,572,000)
                                                   ----------        ----------
     Income from discontinued operations          $   293,000       $   251,000
                                                   ==========        ==========

</TABLE>

NOTE 7 - INVESTMENT IN MARKETABLE SECURITIES

The Company's investment portfolio consists primarily of corporate equities.
The Company has also invested in income producing securities, which may include
interests in real estate based companies and REITs, where financial benefit
could inure to its shareholders through income and/or capital gain.

As of June 30, 2009 and 2008, all of the Company's marketable securities are
classified as trading securities.  In accordance with SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," the change in the
unrealized gains and losses on these investments are included in the statements
of operations.  Trading securities are summarized as follows:

<TABLE>

As of June 30, 2009
                               Gross         Gross            Net             Market
Investment   Cost        Unrealized Gain Unrealized Loss  Unrealized Gain     Value
---------- -----------   --------------- ---------------  ---------------  ------------
<S>        <C>            <C>             <C>               <C>            <C>
Corporate
Equities   $ 8,170,000    $ 7,075,000     ($1,325,000)      $ 5,750,000    $13,920,000


As of June 30, 2008
                               Gross         Gross            Net             Market
Investment   Cost        Unrealized Gain Unrealized Loss  Unrealized Gain     Value
---------- -----------   --------------- ---------------  ---------------  ------------
Corporate
Equities   $ 5,869,000    $ 2,127,000     ($1,290,000)      $   837,000    $ 6,706,000

</TABLE>

As of June 30, 2009 and 2008, the Company had $968,000 and $708,000,
respectively, of unrealized losses related to securities held for over one
year.

                                    -59-
<PAGE>

Net gain(loss)on marketable securities on the statement of operations are
comprised of realized and unrealized gain(loss).  Below is the composition of
the two components for the years ended June 30, 2009 and 2008.

<TABLE>

For the years ended June 30,                           2009             2008
                                                    -----------      -----------
<S>                                                 <C>              <C>
Realized gain on marketable securities              $ 1,190,000      $ 1,879,000
Unrealized gain(loss) on marketable securities        4,942,000       (3,440,000)
                                                    -----------      -----------
Net gain(loss) on marketable securities             $ 6,132,000      $(1,561,000)
                                                    ===========      ===========
</TABLE>

As part of the investment strategies, the Company may assume short positions in
marketable securities.  Short sales are used by the Company to potentially
offset normal market risks undertaken in the course of its investing activities
or to provide additional return opportunities.  As of June 30, 2009, the
Company had obligations for securities sold (equities short) of $2,105,000.


NOTE 8 - OTHER INVESTMENTS, NET

The Company may also invest, with the approval of the Securities Investment
Committee, in private investment equity funds and other unlisted securities,
such as convertible notes through private placements. Those investments in non-
marketable securities are carried at cost on the Company's balance sheet as
part of other investments, net of other than temporary impairment losses.

Other investments, net consist of the following:


            Type                           June 30, 2009     June 30, 2008
   ---------------------------         -----------------  ----------------
   Private equity hedge fund           $       5,517,000  $      6,434,000
   Corporate debt instruments                    750,000            64,000
   Other                                         300,000           300,000
                                       -----------------  ----------------
                                       $       6,567,000  $      6,798,000
                                       =================  ================


During the years ended June 30, 2009 and 2008, the Company recorded impairment
losses of $1,300,000 and $1,253,000, respectively.


NOTE 9 - OTHER ASSETS, NET

Other assets consist of the following as of June 30,:

                                2009           2008
                             -----------   -----------
  Accounts receivable, net   $ 1,271,000   $ 1,140,000
  Prepaid expenses               779,000     1,001,000
  Inventory                      483,000       539,000
  Miscellaneous assets, net    1,228,000     1,116,000
                             -----------   -----------
  Total other assets         $ 3,761,000   $ 3,796,000
                             ===========   ===========

Amortization expense of loan fees and franchise costs for the years ended
June30, 2009 and 2008 was $55,000 and $54,000, respectively.

                                    -60-
<PAGE>

NOTE 10 - LINE OF CREDIT:

In April 2004, the Company obtained a revolving $5,000,000 line of credit
("LOC").  The LOC carries a variable interest rate(lender's base rate plus 1%).
Interest is paid on a monthly basis.  During the quarter ended September 2008,
the outstanding balance on the line of credit of $3,462,000 was paid off.

The Partnership has a $2,500,000 unsecured revolving line of credit facility
with a bank that matures on February 2, 2010.  Borrowings under the line of
credit bear interest at Prime plus 3.0% per annum or based on the Wall Street
Journal Prime Rate (3.25%) plus 3.0% per annum, floating, (but subject to a
minimum floor rate at 5.0% per annum).  The interest rate at June 30, 2009 was
6.25%.  The outstanding balance on the line of credit was $1,811,000 and
$1,513,000 as of June 30, 2009 and 2008, respectively.  Borrowings under the
line of credit are subject to certain financial covenants, which are measured
annually at June 30th and December 31st based on the credit arrangement.  The
Partnership was not in compliance with the financial covenants as of June 30,
2009.  The Partnership received a waiver of such non-compliance from the bank
on September 16, 2009.


NOTE 11 - MORTGAGE NOTES PAYABLE

Mortgage notes payable secured by real estate as of June 30, 2009 is summarized
as follows:

               Number        Note            Note          Mortgage  Interest
  Property     of Units   Origination       Maturity        Balance     Rate
                              Date            Date
-----------  ----------- --------------   ------------    ---------    -----

SF Hotel     544 Rooms   July      2005   August    2015 $28,242,000   5.22%
SF Hotel     544 Rooms   March     2005   August    2015  18,515,000   6.42%
                                                         -----------
     Mortgage notes payable - hotel                      $46,757,000
                                                         ===========

Florence          157    June      2005   July      2014   4,084,000   4.96%
Las Colinas       358    April     2004   May       2013  18,760,000   4.99%
Morris County     151    April     2003   May       2013   9,610,000   5.43%
St. Louis         264    May       2008   May       2013   6,098,000   6.16%
Los Angeles        24    May       2001   April     2031   1,610,000   7.15%
Los Angeles         5    September 2000   August    2030     407,000   7.59%
Los Angeles         2    January   2002   February  2032     415,000   6.45%
Los Angeles         1    February  2001   December  2030     442,000   8.44%
Los Angeles        31    September 2003   August    2033   3,750,000   4.35%
Los Angeles        30    August    2007   September 2022   6,850,000   5.97%
Los Angeles        27    October   1999   October   2029   1,717,000   7.73%
Los Angeles        14    December  1999   November  2029   1,015,000   7.89%
Los Angeles        12    November  2003   December  2018     969,000   6.38%
Los Angeles         9    February  2000   December  2029     760,000   7.95%
Los Angeles         8    May       2001   November  2029     529,000   7.00%
Los Angeles         7    November  2003   December  2018   1,001,000   6.38%
Los Angeles         4    November  2003   December  2018     681,000   6.38%
Los Angeles         1    October   2003   November  2033     482,000   5.75%
Los Angeles    Office    March     2009   March     2014   1,191,000   5.02%
Los Angeles    Office    September 2000   December  2013     690,000   6.71%
                                                         -----------
    Mortgage notes payable - real estate                 $61,061,000
                                                         ===========

                                    -61-
<PAGE>

Austin            249    June      2003   July      2023   7,353,000   5.46%
San Antonio       132    December  2008   October   2011   3,317,000   5.00%
                                                         -----------
    Mortgage notes payable - properties held for sale    $10,670,000
                                                         ===========

Mortgage notes payable secured by real estate as of June 30, 2008 is summarized
as follows:

               Number        Note            Note          Mortgage  Interest
  Property     of Units   Origination       Maturity        Balance     Rate
                              Date            Date
-----------  ----------- --------------   ------------    ---------    -----

SF Hotel     544 Rooms   July      2005   August    2015 $28,735,000   5.22%
SF Hotel     544 Rooms   March     2005   August    2015  18,747,000   6.42%
                                                         -----------
     Mortgage notes payable - hotel                      $47,482,000
                                                         ===========

Florence          157    June      2005   July      2014 $ 4,146,000   4.96%
Las Colinas       358    April     2004   May       2013  19,089,000   4.99%
Morris County     151    April     2003   May       2013   9,788,000   5.43%
St. Louis         264    May       2008   May       2013   5,700,000   6.73%
Los Angeles        24    May       2001   April     2031   1,640,000   7.15%
Los Angeles         5    September 2000   August    2030     414,000   7.59%
Los Angeles         2    January   2002   February  2032     424,000   6.45%
Los Angeles         1    February  2001   December  2030     449,000   8.44%
Los Angeles        31    September 2003   August    2033   3,848,000   4.35%
Los Angeles        30    August    2007   September 2022   6,850,000   5.97%
Los Angeles        27    October   1999   October   2029   1,751,000   7.73%
Los Angeles        14    December  1999   November  2029   1,034,000   7.89%
Los Angeles        12    November  2003   December  2018     985,000   6.38%
Los Angeles         9    February  2000   December  2029     774,000   7.95%
Los Angeles         8    May       2001   November  2029     539,000   7.00%
Los Angeles         7    November  2003   December  2018   1,018,000   6.38%
Los Angeles         4    November  2003   December  2018     693,000   6.38%
Los Angeles         1    October   2003   November  2033     491,000   5.75%
Los Angeles    Office    May       1999   April     2009   1,081,000   7.76%
Los Angeles    Office    September 2000   December  2013     719,000   6.71%
                                                         -----------
    Mortgage notes payable - real estate                 $61,433,000
                                                         ===========

Austin            249    June      2003   July      2023 $ 7,497,000   5.46%
San Antonio       132    November  1998   December  2008   2,816,000   6.62%
                                                         -----------
    Mortgage notes payable - properties held for sale    $10,313,000
                                                         ===========

On July 27, 2005, Justice entered into a first mortgage loan with The
Prudential Insurance Company of America in a principal amount of $30,000,000
(the "Prudential Loan").  The term of the Prudential Loan is for 120 months at
a fixed interest rate of 5.22% per annum. The Prudential Loan calls for monthly
installments of principal and interest in the amount of approximately $165,000,
calculated on a 30-year amortization schedule. The Loan is collateralized by a
first deed of trust on the Partnership's Hotel property, including all
improvements and personal property thereon and an assignment of all present and
future leases and rents. The Prudential Loan is without recourse to the limited
and general partners of Justice.

                                    -62-
<PAGE>

In March 2007, Justice entered into a second mortgage loan with The Prudential
Insurance Company of America (the "Second Prudential Loan") in a principal
amount of $19,000,000. The term of the Second Prudential Loan is for
approximately 100 months and matures on August 5, 2015, the same date as the
Partnership's first mortgage loan with Prudential. The Second Prudential Loan
is at a fixed interest rate of 6.42% per annum and calls for monthly
installments of principal and interest in the amount of approximately $119,000,
calculated on a 30-year amortization schedule. The Loan is collateralized by a
second deed of trust on the Partnership's Hotel property, including all
improvements and personal property thereon and an assignment of all present and
future leases and rents. The Loan is without recourse to the limited and
general partners of Justice. From the proceeds of the Second Prudential Loan,
Justice retired its existing line of credit facility with United Commercial
Bank ("UCB") paying off the outstanding balance of principal and interest of
approximately $16,403,000 on March 27, 2007.

In March 2009, the Company refinanced its $1,054,000 loan on its corporate
office building and obtained a new loan in the amount of $1,200,000.  The
interest rate on the loan is fixed at 5.02% and the loan matures in March 2014.

In October 2008, the Company refinanced the mortgage on its 132-unit apartment
located in San Antonio, Texas and obtained a new mortgage loan in the amount of
$2,850,000.  The interest rate on the loan is fixed at 5.26% and the loan
matures in October 2011.  In December 2008, the Company modified this loan and
borrowed an additional $504,000.  As part of the loan modification, the fixed
interest rate was reduced to 5.0% with no change to the maturity date.

In July 2008, the Company modified the mortgage on its 264-unit apartment
complex located in St. Louis, Missouri and borrowed an additional $500,000 on
the note.  The term and the interest rate on the note remain the same.

In May 2008, the Company refinanced its $5,136,000 mortgage note on its 264-
unit complex located in St. Louis, Missouri and obtained a new mortgage note
payable in the amount of $5,700,000.  The term of the note is 5 years with a
fixed interest rate of 6.16%.  In July 2008, the Company modified this note and
borrowed an additional $500,000.  The term and interest rate on the amended
note of $6,194,000 remain the same.

In August 2007, the Company refinanced its $7,203,000 construction loan on its
30-unit apartment complex located in Los Angeles, California and obtained a
mortgage note payable in the amount of $6,850,000.  The term of the note is 15
years, with interest only for the first two years.  The interest is fixed at
5.97%.

The annual combined aggregate principal payments on the mortgage notes payable
for the five-year period commencing July 1, 2008, and thereafter, are as
follows:

                 Year ending June 30,
                      2010             $   2,132,000
                      2011                 2,335,000
                      2012                 5,561,000
                      2013                34,073,000
                      2014                 3,338,000
                      Thereafter          71,049,000
                                         -----------
                       Total           $ 118,488,000
                                         ===========

                                    -63-
<PAGE>

NOTE 12 - OTHER LIABILITIES

Other liabilities include notes payable and capital lease obligations of
Justice Investors.

The Partnership has short-term financing agreements with a financial
institution for the payment of its general, property, and workers' compensation
insurance.  The notes payable under these financing agreements bear interest at
3.8% per annum and payable in equal monthly installments (principal and
interest) through December 2009.   The notes payable at June 30, 2009 and 2008,
were $246,000 and $300,000 respectively.  These notes were included as part of
accounts payable and other liabilities on the consolidated balance sheets.

The Partnership has a $480,000 note payable to Evon Corporation maturing on
November 15, 2010.  Monthly installments of $29,000 of principal and interest
are required under the terms of the note.  The interest on the note is fixed at
2.4% per annum. This note was included as part of accounts payable and other
liabilities on the consolidated balance sheets.

The Partnership has a $104,000 note payable to Ace Parking Management, Inc.
which matures on December 1, 2010.  Monthly installments of $6,000 of principal
and interest are required under the terms of the note.  The interest on the
note is fixed at 8.50% per annum. This note was included as part of accounts
payable and other liabilities on the consolidated balance sheets.

Future minimum payments for all notes payable are as follows:

For the year ending June 30,

          2010                       $    651,000
          2011                            179,000
                                      -----------
                                     $    830,000
                                      ===========

Justice leases certain equipment under capital leases expiring in various years
through 2012. The capital lease obligations at June 30, 2009 and 2008, were
$450,000 and $638,000, respectively. These notes were included as part of
accounts payable and other liabilities on the consolidated balance sheets

Minimum future lease payments for assets under capital leases as of June 30,
2009 for each of the next five years and in aggregate are:

    Year ending June 30
          2010                                         $ 243,000
          2011                                           243,000
          2012                                            14,000
                                                        --------
            Total minimum lease payments:                500,000
            Less interest on capital leases              (50,000)
                                                        --------
            Present value of minimum lease payments      450,000
                                                        ========

                                    -64-
<PAGE>

NOTE 13 - HOTEL RENTAL INCOME AND TERMINATION OF GARAGE LEASE

The Partnership had a lease agreement with Evon for the use of the parking
garage, which was to expire in November 2010.  Effective October 1, 2008,
Justice and Evon entered into an installment sale agreement whereby Justice
purchased all of Evon's right, title, and interest in the remaining term of the
garage lease and other related assets.  Justice also agreed to assume Evon's
contract with Ace Parking Management, Inc. (Ace) for the management of the
garage and note payable to Ace related to the operation of the garage
commencing October 1, 2008.  The purchase price for the garage lease and
related assets was $755,000, payable in one down payment of $28,000 and 26
equal monthly installments of $29,000, which includes interest at the rate of
2.4% per annum.  The notes payable to Ace and Evon are included in accounts
payable and other liabilities balance of $8,531,000 on the consolidated balance
sheets.  For the year ended June 30, 2009, the Partnership recorded a loss on
termination of the garage lease of $684,000.

Prior to the installment sale agreement, the garage lease had provided for a
monthly rental equal to the greater of the sum of $20,000, or an amount equal
to 60% of gross parking revenues as defined by the lease.  For the three months
ended September 30, 2008 and the year ended June 30, 2008, the Partnership
recorded rental income from Evon of $402,000 and $1,602,000, respectively.

The Partnership has a lease agreement with Tru Spa, LLC (Tru Spa) for the use
of the spa facilities expiring in May 2013.  The lease provides the Partnership
with minimum monthly payments of $14,000, subject to increases based on the
Consumer Price Index.  Minimum future rentals to be received under this non-
cancelable operating lease as of June 30, 2009 are as follows:


   For the year ending June 30,
       2010                       $      165,000
       2011                              165,000
       2012                              165,000
       2013                              151,000
                                  --------------
                                  $      646,000
                                  ==============


NOTE 14 - HOTEL MANAGEMENT AGREEMENT

On February 2, 2007, the Partnership entered into an agreement with Prism to
manage and operate the Hotel as its agent.  The agreement is effective for a
term of ten years, unless the agreement is extended or earlier terminated as
provided in the agreement.  Under the management agreement, the Partnership is
required to pay the base management fees of 2.5% of gross operating revenues of
the Hotel (i.e., room, food and beverage, and other operating departments) for
the fiscal year.  However, 0.75% of the stated management fee is due only if
the partially adjusted net operating income of the hotel for the fiscal year
exceeds the amount of the Hotel return for the fiscal year.  Prism is also
entitled to an incentive management fee if certain milestones are accomplished.
No incentive fees were paid during the years ended June 30, 2009 and 2008.  In
support of the Partnership's efforts to reduce costs in this difficult economic
environment, Prism agreed to reduce its management fees by fifty percent from
January 1, 2009, through December 31, 2009, after which the original fee
arrangement will remain in effect.  Management fees paid to Prism during the
years ended June 30, 2009 and 2008 were $398,000 and $571,000, respectively.

                                    -65-
<PAGE>

NOTE 15 - INCOME TAXES

The provision for the Company's income tax benefit(expense) is comprised of the
following:

<TABLE>

For the years ended June 30,             2009                                    2008
                            ------------------------------------  -------------------------------------
                                         Discontinued                           Discontinued
                            Operations    Operations      Total    Operations   Operations     Total
                            -----------  -----------  ----------  ----------- ------------  ----------
<S>                         <C>          <C>          <C>         <C>          <C>          <C>
Federal
 Current tax expense        $   (15,000) $         -  $  (15,000) $   (83,000) $         -  $   (83,000)
 Deferred tax benefit          (598,000)    (100,000)   (698,000)   1,586,000   (1,470,000)     116,000
                            -----------  -----------  ----------  ----------- ------------  -----------
                               (613,000)    (100,000)   (713,000)   1,503,000   (1,470,000)      33,000
                            -----------  -----------  ----------  ----------- ------------  -----------
State
 Current tax expense           (159,000)     (17,000)   (176,000)     (25,000)           -      (25,000)
 Deferred tax benefit           (55,000)           -     (55,000)     527,000     (238,000)     289,000
                            -----------  -----------   ---------  ------------ -----------   ----------
                               (214,000)     (17,000)   (231,000)     502,000     (238,000)     264,000
                            -----------  -----------   ---------  -----------  -----------   ----------
                            $  (827,000) $  (117,000  $ (944,000) $ 2,005,000  $(1,708,000) $   297,000
                            ===========  ===========  ==========  =========== ============  ===========

</TABLE>

The provision for income taxes differs from the amount of income tax computed
by applying the federal statutory income tax rate to income before taxes as a
result of the following differences:

For the years ended June 30,                       2009        2008
                                                 ---------   ---------
Income tax at federal statutory rates            $(240,000)  $ 866,000
State income taxes, net of federal benefit        (149,000)    216,000
Dividend received deduction                         31,000      26,000
Minority interest benefit                         (469,000)   (273,000)
Other adjustments                                  (90,000)   (207,000)
Valuation allowance                                (27,000)   (331,000)
                                                 ---------    --------
   Total income tax (expense)benefit             $(944,000)  $ 297,000
                                                 =========    ========


The components of the deferred tax asset and liabilities are as follows:

As of June 30,                                      2009         2008
Deferred tax assets                              ----------    ----------
 Net operating loss carryforwards               $ 9,264,000  $  8,435,000
 Other investment impairment reserve              1,062,000       649,000
 Accruals and reserves                              916,000       929,000
 Valuation allowance                             (1,197,000)   (1,171,000)
                                                 ----------    ----------
                                                 10,045,000     8,842,000
Deferred tax liabilities
 Deferred real estate gains                      (8,858,000)   (8,831,000)
 Unrealized gains on marketable securities       (2,421,000)     (363,000)
 Depreciation                                      (209,000)      (47,000)
 Equity earnings                                 (1,109,000)   (1,380,000)
 State taxes                                       (287,000)     (307,000)
                                                 ----------   -----------
                                                (12,884,000)  (10,928,000)
                                                 ----------   -----------
Net deferred tax liability                      $(2,839,000) $ (2,086,000)
                                                 ==========   ===========

                                    -66-
<PAGE>

As of June 30, 2008, the Company had net operating losses(NOLs) of $22,372,000
and $21,441,000 for federal and state purposes, respectively.  Below is the
break-down of the NOLs for Intergroup, Santa Fe and Portsmouth. The
carryforward expires in varying amounts through the year 2028.

                                    Federal         State
                                  ----------    ----------
Intergroup                       $ 5,415,000   $ 7,898,000
Santa Fe                           4,676,000     1,585,000
Portsmouth                        12,281,000    11,958,000
                                  ----------    ----------
                                 $22,372,000   $21,441,000
                                  ==========    ==========

NOTE 16 - SEGMENT INFORMATION

The Company operates in three reportable segments, the operation of the hotel
("Hotel Operations"), the operation of its multi-family residential properties
("Real Estate Operations") and the investment of its cash in marketable
securities and other investments ("Investment Transactions"). These three
operating segments, as presented in the financial statements, reflect how
management internally reviews each segment's performance.  Management also
makes operational and strategic decisions based on this information.

Information below represents reported segments for the years ended June 30,
2009 and 2008.  Operating income(loss) from hotel operations consist of the
operation of the hotel and operation of the garage.  Operating income for
rental properties consist of rental income.  Operating income for investment
transactions consist of net investment gain(loss) and dividend and interest
income.

<TABLE>

As of and
For the year ended           Hotel       Real estate    Investment                                 Discontinued
June 30, 2009              Operations    operations    Transactions     Other        Subtotal      Operations       Total
                           -----------   -----------   -----------   -----------   ------------   ------------   ------------
<S>                        <C>           <C>           <C>          <C>            <C>            <C>            <C>
Operating income           $32,821,000   $12,787,000   $         -  $          -   $ 45,608,000   $  2,608,000   $ 48,216,000
Operating expenses         (32,670,000)   (8,459,000)            -    (1,663,000)   (42,792,000)    (2,315,000)   (45,107,000)
                           -----------   -----------   -----------   -----------   ------------   ------------   ------------
Income(loss) from
 operations                    151,000     4,328,000             -    (1,663,000)     2,816,000        293,000      3,109,000

Interest expense            (2,873,000)   (3,381,000)            -             -     (6,254,000)             -     (6,254,000)
Income from investments              -             -     3,851,000             -      3,851,000              -      3,851,000
Income tax expense                   -             -             -      (827,000)      (827,000)      (117,000)      (944,000)
Minority interest                    -             -             -       627,000        627,000              -        627,000
                           -----------   -----------   -----------   -----------   ------------   ------------   ------------
Net income(loss)           $(2,722,000)  $   947,000   $ 3,851,000   $(1,863,000) $     213,000  $     176,000  $     389,000
                           ===========   ===========   ===========   ===========   ============   ============   ============
Total Assets               $44,791,000   $63,028,000   $20,487,000   $ 6,383,000  $ 134,689,000  $   7,653,000   $142,342,000
                           ===========   ===========   ===========   ===========   ============   ============   ============


As of and
For the year ended           Hotel       Real estate    Investment                                 Discontinued
June 30, 2008(As Restated) Operations    operations    Transactions     Other        Subtotal      Operations       Total
                           -----------   -----------   -----------   -----------   ------------   ------------   ------------
Operating income           $37,778,000   $12,833,000   $         - $          -   $ 50,611,000   $  2,823,000   $ 53,434,000
Operating expenses         (36,530,000)   (8,541,000)            -   (1,817,000)   (46,888,000)    (2,572,000)   (49,460,000)
                           -----------   -----------   -----------   -----------   ------------   ------------   ------------
Income(loss) from
Operations                   1,248,000     4,292,000             -   (1,817,000)      3,723,000        251,000      3,974,000

Gain on sale of real estate          -             -             -             -              -      4,074,000      4,074,000
Interest expense            (2,858,000)   (3,497,000)            -             -     (6,355,000)             -     (6,355,000)
Loss from investments                -             -    (4,240,000)             -    (4,240,000)             -     (4,240,000)
Income tax benefit(expense)          -             -             -     2,005,000      2,005,000     (1,708,000)       297,000
Minority interest                    -             -             -     1,213,000      1,213,000              -      1,213,000
                           -----------   -----------   -----------   -----------   ------------   ------------   ------------
Net income(loss)           $(1,610,000)  $   795,000   $(4,240,000)  $ 1,401,000  $  (3,654,000) $   2,617,000   $ (1,037,000)
                           ===========   ===========   ===========   ===========   ============   ============   ============
Total Assets               $48,122,000   $65,296,000   $13,504,000   $ 7,355,000  $ 134,277,000  $   7,064,000   $141,341,000
                           ===========   ===========   ===========   ===========   ============   ============   ============

</TABLE>
                                    -67-
<PAGE>

NOTE 17 - STOCK-BASED COMPENSATION PLANS

The Company follows the Statement of Financial Accounting Standards 123
(Revised), "Share-Based Payments" ("SFAS No. 123R") which addresses accounting
for equity-based compensation arrangements, including employee stock options.
Under SFAS No. 123R, compensation expense is recognized using the fair-value
based method for all new awards granted after July 1, 2006. No stock options
were issued by the Company after July 1, 2006. Additionally, compensation
expense for unvested stock options that are outstanding at July 1, 2006 is
recognized over the requisite service period based on the fair value of those
options as previously calculated at the grant date under the pro-forma
disclosures of SFAS 123. The fair value of each grant is estimated using the
Black-Scholes option pricing model.

On December 7, 2008, the Company's 1998 Stock Option Plan for Key Officers and
Employees expired; however, any outstanding options issued under that plan
remain effective in accordance with their terms. Previously, the Company's 1998
Stock Option Plan for Non-Employee Directors Plan was terminated upon
shareholder approval, and Board adoption, of the 2007 Stock Compensation Plan
for Non-Employee Directors; however, any outstanding options under that plan
remained effective in accordance with their terms.

On December 3, 2008, the Board of Directors of the Company adopted, subject to
shareholder approval, a new equity compensation plan for its officers,
directors and key employees entitled, The InterGroup Corporation 2008
Restricted Stock Unit Plan (the "Plan"). The Plan was adopted, in part, to
replace the stock option plans that expired on December 7, 2008. The Plan was
approved by shareholders at the Company's Annual Meeting of Shareholders on
February 18, 2009.

The Plan authorizes the Company to issue restricted stock units ("RSUs") as
equity compensation to officers, directors and key employees of the Company on
such terms and conditions established by the Compensation Committee of the
Company. RSUs are not actual shares of the Company's common stock, but rather
promises to deliver common stock in the future, subject to certain vesting
requirements and other restrictions as may be determined by the Committee.
Holders of RSUs have no voting rights with respect to the underlying shares of
common stock and holders are not entitled to receive any dividends until the
RSUs vest and the shares are delivered. No awards of RSUs shall vest until at
least six months after shareholder approval of the Plan. Subject to certain
adjustments upon changes in capitalization, a maximum of 200,000 shares of the
common stock are available for issuance to participants under the Plan.  The
Plan will terminate ten (10) years from December 3, 2008, unless terminated
sooner by the Board of Directors. After the Plan is terminated, no awards may
be granted but awards previously granted shall remain outstanding in accordance
with the Plan and their applicable terms and conditions.

Under the Plan, the Compensation Committee also has the power and authority to
establish and implement an exchange program that would permit the Company to
offer holders of awards issued under prior shareholder approved compensation
plans to exchange certain options for new RSUs on terms and conditions to be
set by the Committee. The exchange program is designed to increase the
retention and motivational value of awards granted under prior plans. In
addition, by exchanging options for RSUs, the Company will reduce the number of
shares of common stock subject to equity awards, thereby reducing potential
dilution to stockholders in the event of significant increases in the value of
its common stock.

                                    -68-
<PAGE>

Pursuant to an exchange offer authorized by the Compensation Committee, a total
of 5,812 RSUs were issued to four holders of Non-Employee Director stock
options in exchange for a total of 36,000 stock options which were surrendered
to the Company on December 7, 2008. The number of RSUs issued was determined by
multiplying the number of options that were surrendered by the difference
between the exercise price of the options surrendered ($8.00) and the closing
price of the Company's common stock on December 5, 2008 of $9.54, with that
product divided by the closing price of the common stock on December 5, 2009.
No stock option compensation expense was recognized related to the exchange as
the fair market value of the options immediately prior to the exchange,
approximated the fair value of the RSUs on the day of issuance.
Pursuant to a further exchange offer authorized by the Compensation Committee,
a total of 4,775 RSUs were issued to five holders of Non-Employee Director
stock options in exchange for a total of 15,000 stock options which were
surrendered to the Company on June 30, 2009. The number of RSUs issued was
determined by multiplying the number of options that were surrendered by the
difference between the exercise price of the options surrendered ($8.17) and
the closing price of the Company's common stock on June 30, 2009 of $11.99,
with that product divided by the closing price of the common stock on June 30,
2009. The 4,775 RSUs issued pursuant to that exchange offer vest on January 7,
2010.
On December 15, 2008, the Compensation Committee authorized a similar exchange
offer to the Company's CEO, John Winfield, respecting 225,000 vested stock
options issued to him under the Key Employee Plan.  Pursuant to that exchange
offer, Mr. Winfield surrendered his 225,000 options to the Company on December
21, 2008 in exchange for 84,628 RSUs. The number of RSUs issued was based on
the difference between the exercise price of the options surrendered of $7.917
and the closing price of the Company's common stock on December 19, 2008 of
$12.69, using the same formula as the exchange offer to the holders of the Non-
Employee Director options. The RSUs issued to Mr. Winfield vest as follows:
September 10, 2009 - 54,628 shares; September 10, 2010 - 15,000 shares; and
September 10, 2011 - 15,000 shares. No stock option compensation expense was
recognized related to the exchange as the fair market value of the options
immediately prior to the exchange, approximated the fair value of the RSUs on
the day of issuance.

The table below summarizes the RSUs granted and outstanding.

                                         Number of RSUs
                                         --------------
Granted                                      95,215
                                         --------------
Outstanding at June 30, 2009                 95,215
                                         ==============

In December 2008, a director exercised his 12,000 stock options and acquired
12,000 shares of the Company stock at $8.00 per share.  No stock compensation
was recognized as compensation expense for these options as they were
previously calculated at the grant date under the pro-forma disclosures of SFAS
123.

                                    -69-
<PAGE>

The following table summarizes the stock options outstanding as of June 30,
2009:

                                      Number of         Weighted-average
                                       Shares            Exercise Price
                                      ----------         ---------------
  Outstanding at June 30, 2007          405,000                   $9.91
Granted                                       -                       -
Exercised                                     -                       -
Forfeited                               (15,000)                  35.11
                                      ----------         ---------------
  Outstanding at June 30, 2008          390,000                    9.13
Granted                                       -                       -
Exercised                               (12,000)                   8.00
Forfeited                                     -                       -
Exchanged                              (276,000)                   7.94
                                      ----------         ---------------
  Outstanding at June 30, 2009           102,000                  $12.47
                                      ==========         ===============

Exercisable at June 30, 2009             99,750                  $12.15
                                      ==========         ===============

The range of exercise prices for the outstanding and exercisable options as of
June 30, 2009 are as follows:

<TABLE>

                           Number of   Range of        Weighted Average  Weighted Average
                           Options     Exercise Price  Exercise Price    Remaining Life
                           ---------   --------------  ----------------  ----------------
<S>                        <C>         <C>               <C>               <C>
Outstanding options        102,000     $8.17-$18.00      $ 12.47           3.15 years
Exercisable options         99,750     $8.17-$18.00      $ 12.15           3.14 years

</TABLE>

NOTE 18 - RELATED PARTY TRANSACTIONS

The contractor that was selected to oversee the garage and the first four
floors' renovation (excluding room upgrades) of the Hotel is the contractor who
originally constructed the Hotel.  He is also a partner in the Partnership and
is a director of Evon Corporation, the co-general partner of the Partnership.
The contractor is also a board member of Evon Corporation.  Payable to the
contractor was $0 and $67,000 at June 30, 2009 and 2008, respectively.
Services performed by the contractor were capitalized as fixed assets which
totaled $103,000 and $399,000 for the years ended June 30, 2009 and 2008,
respectively.  Management believes these renovations were competitively priced.

Through September 30, 2008, Evon, was the lessee of the parking garage.  Evon
paid the Partnership $402,000 and $1,602,000 for the three months ended
September 30, 2008 and the year ended June 30, 2008, respectively, under the
terms of the lease agreement.  Rent receivable from Evon at June 30, 2008 was
$15,000.  The lease agreement with Evon was terminated effective October 1,
2008.  Concurrently, an installment sale agreement was entered between Justice
and Evon.  Justice had a note payable to Evon totaling $480,000 as of June 30,
2009.

As Chairman of the Securities Investment Committee, the Company's President and
Chief Executive Officer, John V. Winfield, directs the investment activity of
the Company in public and private markets pursuant to authority granted by the
Board of Directors.  Mr. Winfield also serves as Chief Executive Officer
and Chairman of InterGroup and oversees the investment activity
of the Company.  Depending on certain market conditions and various risk
factors, the Chief Executive Officer, his family and the Company may, at

                                    -70-
<PAGE>

times, invest in the same companies in which the Company invests.  The Company
encourages such investments because it places personal resources of the Chief
Executive Officer and his family members, and the resources of InterGroup, at
risk in connection with investment decisions made on behalf of the Company.

On July 18, 2003, the Company's subsidiaries established a performance based
compensation program for the Company's CEO, John V. Winfield, to keep and
retain his services as a direct and active manager of the securities portfolios
of those companies.  On January 12, 2004, the disinterested members of the
Securities Investment Committee of InterGroup also established a performance
based compensation program for Mr. Winfield, which was ratified by the Board of
Directors. The Company's previous experience and results with outside money
managers was not acceptable.  Pursuant to the criteria established the Board of
Directors, Mr. Winfield is entitled to performance compensation for his
management of the securities portfolios of the Company and its subsidiaries
equal to 20% of all net investment gains generated in excess of an annual
return equal to the Prime Rate of Interest (as published by the Wall Street
Journal) plus 2%. Compensation amounts are earned, calculated and paid
quarterly based on the results of the Company's investment portfolio for that
quarter.  Should the companies have a net investment loss during any quarter,
Mr. Winfield would not be entitled to any further performance-based
compensation until any such investment losses are recouped by the Company.
This performance based compensation program may be modified or terminated at
the discretion of the respective Boards of Directors.

During the year ended June 30, 2009 and 2008, Mr. Winfield did not receive any
performance based compensation.


NOTE 19 - COMMITMENTS AND CONTINGENCIES

Justice leases equipment from an unrelated third party under operating leases
with expiration dates through 2010.  The future minimum payments under these
operating leases amounted to about $10,000 as of June 30, 2009.

During the years ended June 30, 2009 and 2008, the general partners were paid
$285,000 and $285,000, respectively, for the minimum base compensation.  At
June 30, 2009 and 2008, net payable was $0 and $5,000, respectively, which
reflects amounts payable for the Consumer Price Index (CPI) percentage
adjustment from prior years that were not previously captured.  The amounts of
$140,000 and $232,000 for base compensation over the minimum were earned during
the years ended June 30, 2009 and 2008, respectively.  Pursuant to the terms of
the prior compensation agreement, the general partners were also eligible for
incentive compensation based upon 5% of net operating income of the Partnership
in excess of $7 million.  No incentive compensation was paid during the years
ended June 30, 2009 and 2008.

The Partnership entered into a Franchise License agreement (the License
agreement) with the Hilton Hotels Corporation (Hilton) on December 10, 2004.
The term of the License agreement is for a period of 15 years commencing on the
opening date, with an option to extend the license agreement for another five
years, subject to certain conditions.

Beginning on the opening date in January 2006, the Partnership pays monthly
royalty fees for the first two years of three percent (3%) of the Hotel's gross
room revenue for the preceding calendar month; the third year will be four
percent (4%) of the Hotel's gross room revenue; and the fourth year until the
end of the term will be five percent (5%) of the Hotel's gross room revenue.
The Partnership also pays a monthly program fee of four percent (4%) of the

                                    -71-
<PAGE>

Hotel's gross revenue.  The amount of the monthly program fee is subject to
change; however, the increase cannot exceed one percent (1%) of the Hotel gross
room revenue in any calendar year, and the cumulative increases in the monthly
fees will not exceed five percent (5%) of gross room revenue.  Franchise fees
for the years ended June 30, 2009 and 2008 were $2,128,000 and $2,182,000,
respectively.

The Partnership also pays Hilton a monthly information technology recapture
charge of 0.75% of the Hotel's gross revenues.  In this difficult economic
environment, Hilton agreed to reduce its information technology fees to .50%
for the 2009 calendar year.  For the years ended June 30, 2009 and 2008, those
charges were $166,000 and $221,000, respectively.

The Company is involved from time to time in various claims in the ordinary
course of business. Management does not believe that the impact of such matters
will have a material effect on the financial conditions or result of operations
when resolved.

Administrative Fees-General Partners

During the years ended June 30, 2009 and 2008, the general partners were paid
$285,000 and $285,000, respectively, for the minimum base compensation.  At
June 30, 2009 and 2008, net payable was $0 and $5,000, respectively, which
reflects amounts payable for the Consumer Price Index (CPI) percentage
adjustment from prior years that were not previously captured.  The amounts of
$140,000 and $232,000 for base compensation over the minimum were earned during
the years ended June 30, 2009 and 2008, respectively.  Pursuant to the terms of
the prior compensation agreement, the general partners were also eligible for
incentive compensation based upon 5% of net operating income of the Partnership
in excess of $7 million.  No incentive compensation was paid during the years
ended June 30, 2009 and 2008.

Franchise Agreements

The Partnership entered into a Franchise License agreement (the License
agreement) with the Hilton Hotels Corporation (Hilton) on December 10, 2004.
The term of the License agreement is for a period of 15 years commencing on the
opening date, with an option to extend the license agreement for another five
years, subject to certain conditions.

Beginning on the opening date in January 2006, the Partnership pays monthly
royalty fees for the first two years of three percent (3%) of the Hotel's gross
room revenue for the preceding calendar month; the third year will be four
percent (4%) of the Hotel's gross room revenue; and the fourth year until the
end of the term will be five percent (5%) of the Hotel's gross room revenue.
The Partnership also pays a monthly program fee of four percent (4%) of the
Hotel's gross revenue.  The amount of the monthly program fee is subject to
change; however, the increase cannot exceed one percent (1%) of the Hotel gross
room revenue in any calendar year. Franchise fees for the years ended June 30,
2009 and 2008 were $2,128,000 and $2,182,000, respectively.

The Partnership also pays Hilton a monthly information technology recapture
charge of 0.75% of the Hotel's gross revenues.  In this difficult economic
environment, Hilton agreed to reduce its information technology fees to .50%
for the 2009 calendar year.  For the years ended June 30, 2009 and 2008, those
charges were $166,000 and $221,000, respectively.

                                    -72-
<PAGE>

Legal Matters

The Company is involved from time to time in various claims in the ordinary
course of business. Management does not believe that the impact of such matters
will have a material effect on the financial conditions or result of operations
when resolved.


NOTE 20 - EMPLOYEE BENEFIT PLAN

Justice has a 401(k) Profit Sharing Plan (the Plan) for employees who have
completed six (6) months of service.  Justice provides a matching contribution
to the Plan based upon a certain percentage on the employees' elective
deferrals.  Justice may also make discretionary contributions to the Plan
each year.  Contributions made to the Plan amounted to $73,000 and $37,000
during the years ended June 30, 2009 and 2008, respectively.


Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.


Item 9A(T). Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 We maintain a system of disclosure controls and procedures that are designed
for the purposes of ensuring that information required to be disclosed in this
filing is accumulated and communicated to management and is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms. The Company's management,
with the participation of the Company's Chief Executive Officer and Principal
Financial Officer, has evaluated the effectiveness of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the
Exchange Act) as of the end of the fiscal period covered by this Annual Report
on Form 10-K.  In connection with the restatements, and for the reasons
described in Note 3 to our Consolidated Financial Statements, management
concluded that our disclosure controls and procedures were not effective as of
June 30, 2009. In light of this conclusion, the Company performed additional
analyses and other review procedures to ensure the Company's Consolidated
Financial Statements are prepared in accordance with generally accepted
accounting principles. Accordingly, management believes that the financial
statements included in this report fairly represent in all material respects
the Company's financial condition, results of operations and cash flows for the
periods presented.


MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934, for the Company. In establishing
adequate internal control over financial reporting, management has developed
and maintained a system of internal control, policies and procedures designed
to provide reasonable assurance that information contained in the accompanying
consolidated financial statements and other information presented in this

                                    -73-
<PAGE>

annual report is reliable, does not contain any untrue statement of a material
fact or omit to state a material fact, and fairly presents in all material
respects the financial condition, results of operations, shareholders' equity
and cash flows of the Company as of and for the periods presented in this
annual report.

Management conducted an evaluation of the effectiveness of Company's internal
control over financial reporting using the framework in Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on its evaluation under that framework, management
believes that the Company's internal control over financial reporting was not
effective as of June 30, 2009, due to the errors resulting in the restatements
and for the reasons discussed in Note 3 to the Consolidated financial
Statements. While management did not conclude that there was a material
weakness in the design or operation of internal control over financial
reporting which is reasonably likely to adversely affect the Company's ability
to record, process, summarize and report financial information, they did
conclude that there was a significant deficiency in the Company's application
of accounting guidance that resulted in the restatements.

This Annual Report on Form 10-K does not include an attestation report of the
Company's independent registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject to
attestation by the Company's independent registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission that
permit the Company to provide only management's report in this Annual Report on
Form 10-K.


CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in the Company's internal control over financial
reporting during the last quarterly period covered by this Annual Report on
Form 10-K that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.


Item 9B. Other Information.

None to report.


                                    -74-



                          PART III

Item 10.  Directors, Executive Officers and Corporate Governance

The following table sets forth certain information with respect to the
Directors and Executive Officers of the Company as of June 30, 2009:

                         Position with
    Name                  the Company         Age       Term to Expire
------------------     ------------------     ---      -----------------
Class A Directors:

John V. Winfield      Chairman of the Board;   62    Fiscal 2009 Annual Meeting
(1)(4)(6)(7)          President and Chief
                      Executive Officer

Josef A. Grunwald     Director and Vice        61    Fiscal 2009 Annual Meeting
(2)(3)(7)             Chairman of the Board

Class B Directors:

Gary N. Jacobs
(1)(2)(5)(6)(7)       Secretary; Director      64    Fiscal 2010 Annual Meeting

William J. Nance (1)
(2)(3)(4)(6)(7)       Director                 64    Fiscal 2010 Annual Meeting

Class C Director:

John C. Love          Director                 69    Fiscal 2011 Annual Meeting
(3)(4)(5)

Other Executive Officers:

David C. Gonzalez     Vice President           42      N/A
                      Real Estate

Michael G. Zybala     Asst. Secretary          57      N/A
                      and Counsel

David T. Nguyen       Treasurer and            36      N/A
                      Controller
------------------

(1)  Member of the Executive Committee
(2)  Member of the Administrative and Compensation Committee
(3)  Member of the Audit Committee
(4)  Member of the Real Estate Investment Committee
(5)  Member of the Nominating Committee
(6)  Member of the Securities Investment Committee
(7)  Member of the Special Strategic Options Committee


Business Experience:

The principal occupation and business experience during the last five years for
each of the Directors and Executive Officers of the Company are as follows:

John V. Winfield -- Mr. Winfield was first appointed to the Board in 1982. He
currently serves as the Company's Chairman of the Board, President and Chief
Executive Officer, having first been appointed as such in 1987.  Mr. Winfield
also serves as President, Chairman and Chief Executive Officer of Santa Fe

                                    -75-
<PAGE>

Financial Corporation ("Santa Fe") and Portsmouth Square, Inc. ("Portsmouth")
both public companies.

Josef A. Grunwald -- Mr. Grunwald is an industrial, commercial and residential
real estate developer.  He serves as Chairman of PDG N.V. (Belgium), a hotel
management company, and President of I.B.E. Services S.A. (Belgium), an
international trading company.  Mr. Grunwald was first elected to the Board in
1987 and named Vice Chairman on January 30, 2002.  Mr. Grunwald is also a
Director of Portsmouth.

William J. Nance -- Mr. Nance is a Certified Public Accountant and private
consultant to the real estate and banking industries.  He is also President of
Century Plaza Printers, Inc.  Mr. Nance was first elected to the Board in 1984.
He served as the Company's Chief Financial Officer from 1987 to 1990 and as
Treasurer from 1987 to June 2002.  Mr. Nance is also a Director of Santa Fe and
Portsmouth. Mr. Nance also serves as a director of Goldspring, Inc., a public
company.

Gary N. Jacobs -- Mr. Jacobs was appointed to the Board and as Secretary of the
Company in 1998. Mr. Jacobs is a Director and General Counsel of MGM MIRAGE
(NYSE: MGM), having held those positions since 2000. Mr. Jacobs has also served
as Secretary of MGM MIRAGE since 2002 to present and as Executive Vice
President from 2000 to August 2009, when he became President Corporate
Strategy.

John C. Love -- Mr. Love was appointed to the Board in 1998.  Mr. Love is an
international hospitality and tourism consultant and a hotel broker. He was
formerly a partner in the national CPA and consulting firm of Pannell Kerr
Forster.  He is Chairman Emeritus of the Board of Trustees of Golden Gate
University in San Francisco. Mr. Love is also a Director of Santa Fe and
Portsmouth.

David C. Gonzalez -- Mr. Gonzalez was appointed Vice President Real Estate of
the Company on January 31, 2001.  Over the past 20 years, Mr. Gonzalez has
served in numerous capacities with the Company, including Controller and
Director of Real Estate.

David T. Nguyen - Mr. Nguyen was appointed as Treasurer of the Company on
February 26, 2003.  Mr. Nguyen also serves as Treasurer of Santa Fe and
Portsmouth, having been appointed to those positions on February 27, 2003. Mr.
Nguyen is a Certified Public Accountant and, from 1995 to 1999, was employed by
PricewaterhouseCoopers LLP where he was a Senior Accountant specializing in
real estate.  Mr. Nguyen served as the Company's Controller from 1999 to 2001
and from 2003 to the present.

Michael G. Zybala -- Mr. Zybala is an attorney at law and has served as
Assistant Secretary and legal counsel of the Company since January 1999. Mr.
Zybala is also the Vice President and Secretary of Santa Fe and Portsmouth and
has served as their General Counsel since 1995.  Mr. Zybala has provided legal
services to Santa Fe and Portsmouth since 1978.

Family Relationships:  There are no family relationships among directors,
executive officers, or persons nominated or chosen by the Company to become
directors or executive officers.

Involvement in Certain Legal Proceedings:  No director or executive officer, or
person nominated or chosen to become a director or executive officer, was
involved in any legal proceeding requiring disclosure.

                                    -76-
<PAGE>

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and each beneficial owner of more than ten percent of
the Common Stock of the Company, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission.  Officers, directors and
greater than ten-percent shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of Forms 3 and 4 and amendments
thereto furnished to the Company during its most recent fiscal year, or written
representations from certain reporting persons that no Forms 5 were required
for those persons, the Company believes that during fiscal 2009 all filing
requirements applicable to its officers, directors, and greater than ten-
percent beneficial owners were complied with.

Code of Ethics.

The Company has adopted a Code of Ethics that applies to its principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of the Code of
Ethics is posted on the Company's website at www.intergroupcorporation.com. The
Company will provide to any person without charge, upon request, a copy of its
Code of Ethics by sending such request to: The InterGroup Corporation, Attn:
Treasurer, 820 Moraga Drive, Los Angeles 90049. The Company will promptly
disclose any amendments or waivers to its Code of Ethics on Form 8-K.

BOARD AND COMMITTEE INFORMATION

InterGroup's common stock is listed on the NASDAQ Capital Market tier of the
NASDAQ Stock Market, LLC ("NASDAQ"). InterGroup is a Smaller Reporting Company
under the rules and regulations of the Securities and Exchange Commission
("SEC").  With the exception of the Company's President and CEO, John V.
Winfield, all of InterGroup's Board of Directors consists of "independent"
directors as independence is defined by the applicable rules of the SEC and
NASDAQ.

Nominating Committee

The Company's Nominating Committee is comprised of two "independent" directors
as independence is defined by the applicable rules of the SEC and NASDAQ.
Directors Love and Grunwald serve as the current members of the Nominating
Committee. The Company has not established a charter for the Nominating
Committee and the Committee has no policy with regard to consideration of any
director candidates recommended by security holders.  As a smaller reporting
company whose directors own in excess of fifty percent of the voting shares of
the Company, InterGroup has not deemed it appropriate to institute such a
policy.  There have not been any material changes to the procedures by which
security holders may recommend nominees to the Company's board of directors.

Audit Committee and Audit Committee Financial Expert

The Company is a Smaller Reporting Company under SEC rules and regulations.
The Company's Audit Committee is currently comprised of three members:
Directors Nance (Chairperson), Grunwald and Love, each of who meet the
independence requirements of the SEC and NASDAQ as modified or supplemented
from time to time.  The Company's Board of Directors has determined that
Directors Nance and Love also meet the Audit Committee Financial Expert
requirement as defined by the SEC and NASDAQ.

                                    -77-
<PAGE>

Item 11.  Executive Compensation.

The following table provides certain summary information concerning
compensation awarded to, earned by, or paid to the Company's principal
executive officer and other named executive officers of the Company whose total
compensation exceeded $100,000 for all services rendered to the Company and its
subsidiaries for each of the Company's last two completed fiscal years ended
June 30, 2009 and June 30, 2008.   There are currently no employment contracts
with the executive officers. No long-term compensation, options or stock
appreciation rights were granted to any of the named executive officers during
the last two fiscal years.

<TABLE>

                         SUMMARY COMPENSATION TABLE

Name and Principal        Fiscal                        Stock     All Other
Position                   Year     Salary      Bonus   Awards   Compensation       Total
-----------------------    ----   ----------    -----   ------   ------------     ----------
<S>                        <C>    <C>           <C>     <C>        <C>            <C>
John V. Winfield           2009   $522,000(1)   $   -   $  0(2)    $166,000(2)    $ 688,000
Chairman, President and    2008   $522,000(1)   $   -   $  -       $166,000(3)    $ 688,000
Chief Executive Officer

David C. Gonzalez          2009   $180,000      $   -   $  -       $      -       $ 180,000
Vice President             2008   $180,000      $   -   $  -       $      -       $ 180,000
Real Estate

David T. Nguyen            2009   $180,000(4)   $   -   $  -       $      -       $ 180,000
Treasurer and              2008   $180,000(4)   $   -   $  -       $      -       $ 180,000
Controller

Michael G. Zybala          2009   $138,000(5)   $   -   $  -       $      -       $ 138,000
Asst. Secretary            2008   $138,000(5)   $   -   $  -       $      -       $ 138,000
and Counsel
-----------------------
</TABLE>

(1) Mr. Winfield also serves as President and Chairman of the Board of the
Company's subsidiary, Santa Fe, and Santa Fe's subsidiary, Portsmouth.  Mr.
Winfield received a salary from Santa Fe and Portsmouth in the aggregate amount
of $255,000 from those entities for each of fiscal years 2009 and 2008, as well
as director's fees totaling $12,000 for each year. Those amounts are included
in this item.

(2) On December 21, 2008, Mr. Winfield surrendered to the Company 225,000 fully
vested stock options in exchange for 84,628 Restricted Stock Units ("RSUs")
pursuant to an exchange offer made by the Compensation Committee as authorized
by The InterGroup Corporation 2008 Restricted Stock Unit Plan (the "RSU Plan").
Each RSU represents a promise to deliver, in the future, one share of Common
Stock, subject to certain vesting requirements and other restrictions. The
number of RSUs to be issued under the exchange offer was determined by
multiplying the number of options that were surrendered by the difference
between the exercise price of the options surrendered ($7.917) and the closing
price of the Company's common stock on December 19, 2008 of $12.69, with that
product divided by the closing price of the common stock on December 19, 2008.
Since the value of the RSUs issued equaled the value of the options
surrendered, no dollar compensation amount was recognized by the Company for
financial reporting purposes with respect to the 2009 fiscal year in accordance
with FAS 123R. The RSUs will be taxable as ordinary income to Mr. Winfield upon
vesting and delivery of the shares of Common Stock. The issuance of the RSUs

                                    -78-
<PAGE>

was subject to shareholder ratification and approval of the RSU Plan, which was
obtained at the Company's annual meeting of shareholders held on February 18,
2008. Mr. Winfield's RSUs vest and the shares of Common Stock are issuable as
follow: September 10, 2009 - 54,628 shares; September 10, 2010 - 15,000; and
September 10, 2011 - 15,000 shares.

(3) Amounts include an auto allowance and compensation for a portion of the
salary of an assistant. The auto allowance was $29,000 during each of the
fiscal years 2009 and 2008.  The amount of compensation related to the
assistant was approximately $52,000 during each of the fiscal years 2009 and
2008.  During fiscal 2009 and 2008, the Company and its subsidiaries also paid
annual premiums in the total amount of $85,000 for split dollar whole life
insurance policies owned by, and the beneficiary of which are, a trust for the
benefit of Mr. Winfield's family. Of the $85,000 in premiums paid each year,
Santa Fe and Portsmouth paid $43,000 of that amount. The Company has a secured
right to receive, from any proceeds of the policies, reimbursement of all
premiums paid prior to any payment to the beneficiary.

(4) Mr. Nguyen's salary is allocated approximately 50% to the Company and 50%
to Santa Fe and Portsmouth.

(5) For fiscal 2009 and 2008, these amounts includes $94,800 in salary and
Special Hotel Committee fees allocated to and paid by Portsmouth and $16,200 in
salary allocated to Santa Fe.


Compensation Committee and Executive Compensation

The Company's Administrative and Compensation Committee (the "Compensation
Committee") is comprised of three "independent" members of the Board of
Directors as independence is defined by the applicable rules of the SEC and
NASDAQ.  Mr. Nance serves as Chairman of the Compensation Committee. The
Company has not established a charter for the Compensation Committee. The
Compensation Committee reviews and recommends to the Board of Directors the
compensation for the Company's Chief Executive Officer and other executive
officers, including equity or performance based compensation and plans. The
Compensation Committee seeks to design and set compensation to attract and
retain highly qualified executive officers and to align their interests with
those of long-term owners of the Company. The Compensation Committee may also
make recommendations to the Board of Directors as to the amount and form of
director compensation. The Compensation Committee has not engaged any
compensation consultants in determining the amount or form of executive of
director compensation, but does review and monitor published compensation
surveys and studies. The Compensation Committee may delegate to the Company's
Chief Executive Officer the authority determine the compensation of certain
executive officers.  The Compensation Committee also oversees the Company's
2007 Plan and RSU Plan.

On July 18, 2003, the disinterested members of the respective Boards of
Directors of the Company's subsidiary, Santa Fe and Santa Fe's subsidiary,
Portsmouth, established a performance based compensation program for the
Company's CEO, John V. Winfield, to keep and retain his services as a direct
and active manager of the securities portfolios of those companies.  On January
12, 2004, the disinterested members of the Securities Investment Committee of
InterGroup also established a performance based compensation program for Mr.
Winfield, which was ratified by the Board of Directors. The Company's previous
experience and results with outside money managers was not acceptable.

                                    -79-
<PAGE>

Pursuant to the criteria established the Board of Directors, Mr. Winfield is
entitled to performance compensation for his management of the securities
portfolios of the Company and its subsidiaries equal to 20% of all net
investment gains generated in excess of an annual return equal to the Prime
Rate of Interest (as published by the Wall Street Journal) plus 2%.
Compensation amounts are earned, calculated and paid quarterly based on the
results of the Company's investment portfolio for that quarter.  Should the
companies have a net investment loss during any quarter, Mr. Winfield would not
be entitled to any further performance-based compensation until any such
investment losses are recouped by the Company.  This performance based
compensation program may be modified or terminated at the discretion of the
respective Boards of Directors. No performance based compensation was earned or
paid for fiscal years ended June 30, 2009 or 2008.

Internal Revenue Code Limitations

Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that, in the case of a publicly held corporation, the corporation is
not generally allowed to deduct remuneration paid to its chief executive
officer and certain other highly compensated officers to the extent that such
remuneration exceeds $1,000,000 for the taxable year.  Certain remuneration,
however, is not subject to disallowance, including compensation paid on a
commission basis and, if certain requirements prescribed by the Code are
satisfied, other performance based compensation.  Since InterGroup, Santa Fe
and Portsmouth are each public companies, the $1,000,000 limitation applies
separately to the compensation paid by each entity.  For fiscal years 2008 and
2007, no compensation paid by the Company to its CEO or other executive
officers was subject the deduction disallowance prescribed by Section 162(m) of
the Code.


Outstanding Equity Awards at Fiscal Year End.

The following table sets forth information concerning option awards and stock
awards for each named executive officer that were outstanding as of the end of
the Company's last competed fiscal year ended June 30, 2009. There were no
other equity incentive plan awards that were outstanding.

<TABLE>

       Outstanding Equity Awards as of Fiscal Year Ended June 30, 2009

                                    OPTION AWARDS                             STOCK AWARDS
                   --------------------------------------------------    ------------------------

                   Number of      Number of                               Number of  Market value
                   securities    securities                               shares or  of shares or
                   underlying    underlying                                units of    units of
                   unexercised   unexercised     Option      Option       stock that  stock that
                   options(#)     options(#)     exercise   expiration     have not    have not
  Name             exercisable   unexercisable   price($)      date         vested     vested(3)
--------           -----------   -------------   --------   ----------    ----------   ----------
<S>                  <C>           <C>           <C>        <C>           <C>         <C>
John V. Winfield          -             -                                 84,628(2)   $1,014,690

David C. Gonzalez    12,750        2,250(1)      $13.17     01/30/2011         -               -
-----------------
</TABLE>

(1) Mr. Gonzalez's options vest at a rate of 2,250 shares per year on each
    January 31st.

(2) On December 21, 2008, Mr. Winfield surrendered to the Company 225,000
    fully vested stock options in exchange for 84,628 Restricted Stock Units
    ("RSUs")pursuant to an exchange offer made by the Compensation Committee

                                    -80-
<PAGE>

    As authorized by the Company's RSU Plan. The issuance of the RSUs was
    subject to shareholder ratification and approval of the RSU Plan, which
    was obtained at the Company's annual meeting of shareholders held on
    February 18, 2008. The RSUs vest and the shares of Common Stock are
    issuable as follow: September 10, 2009 - 54,826,000 shares; September 10,
    2010 - 15,000 shares; and September 10, 2011 - 15,000 shares.

(3) Market value was calculated based on the closing price of the Company's
    Common Stock on June 30, 2009 of $11.99 per share as reported on the
    NASDAQ Capital Market.


EQUITY COMPENSATION PLANS

The Company currently has two equity compensation plans, each of which has been
approved by the Company's stockholders. The Company's 1998 Stock Option Plan
for Selected Key Officers, Employees and Consultants (the "Key Employee Plan")
expired on December 8, 2008 and no options under the Key Employee Plan were
granted in fiscal 2009. The Key Employee Plan was replaced by The InterGroup
Corporation 2008 Restricted Stock Unit Plan (the "RSU Plan"), described below.
The Company's 1998 Stock Option Plan for Non-Employee Directors (the "Non-
Employee Director Plan") was terminated upon shareholder approval, and Board
adoption, of The InterGroup Corporation 2007 Stock Compensation Plan for Non-
Employee Directors (the "2007 Plan"), described below, since all options
authorized to be issued under the Non-Employee Director Plan were exhausted in
fiscal 2006. Any outstanding options issued under the Key Employee Plan or the
Non-Employee Director Plan remain effective in accordance with their terms.

The purpose of the Company's equity compensation plans is to provide a means
whereby officers, directors and key employees of the Company develop a sense of
proprietorship and personal involvement in the development and financial
success of the Company, and to encourage them to devote their best efforts to
the business of the Company, thereby advancing the interests of the Company and
its shareholders. A further purpose of this Plan is to provide a means through
which the Company may attract able individuals to become employees or serve as
directors of the Company and to provide a means for such individuals to acquire
and maintain stock ownership in the Company, thereby strengthening their
concern for the welfare of the Company.


The InterGroup Corporation 2007 Stock Compensation Plan for Non-Employee
Directors

The 2007 Plan was approved by the shareholders of the Company on February 21,
2007, and was thereafter adopted by the Board of Directors. The 2007 Plan will
terminate upon the earlier of the date all shares reserved for issuance have
been awarded or February 21, 2017, if not sooner terminated by the Board upon
recommendation by the Compensation Committee. The stock to be available for
issuance under the 2007 Plan shall be unrestricted shares of the Company's
Common Stock, par value $.01 per share, which may be unissued shares or
treasury shares.  Subject to certain adjustments upon changes in
capitalization, a maximum of 60,000 shares of the Common Stock will be
available for issuance to participants under the 2007 Plan.

All non-employee directors are eligible to participate in the 2007 Plan. Each
non-employee director as of the adoption date of the 2007 Plan shall be granted
an award of 600 unrestricted shares of the Company's Common Stock.  On each
July 1 following the adoption date of the 2007 Plan, each non-employee director

                                    -81-
<PAGE>

shall receive an automatic grant of a number of shares of Company's Common
Stock equal in value to $18,000 based on 100% of the fair market value (as
defined) of the Common Stock on the date of grant, provided he or she holds
such position on that date and the number of shares of Common Stock available
for grant under the 2007 Plan is sufficient to permit such automatic grant. Any
fractional shares resulting from such grant will be rounded up to next highest
whole share.  All stock awards to non-employee directors will be fully vested
on the date of grant. The dollar amount of the annual grant is subject to
further adjustment by the Board of Directors upon recommendation by the
Compensation Committee.

The stock awards granted under the 2007 Plan are shares of unrestricted Common
Stock and are fully vested on the date of grant. The right of the non-employee
director to receive his or her annual grant of Common is personal to the
director and is not transferable. Once received, shares of Common Stock awarded
to the non-employee director are freely transferable subject to any
requirements of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). On June 28, 2007, Company filed a registration
statement on Form S-8 to register the shares subject to the 2007 Plan and the
Company's two prior stock option plans.

Upon recommendation of the Compensation Committee, the Board may, at any time
and from time to time and in any respect, amend or modify the 2007 Plan. The
Board must obtain stockholder approval of any material amendment to the 2007
Plan if required by any applicable law, regulation or stock exchange rule. The
Board of Directors may amend the 2007 Plan or any award agreement, which
amendment may be retroactive, in order to conform it to any present or future
law, regulation or ruling relating to plans of this or similar nature. No
amendment or modification of the 2007 Plan or any award agreement may adversely
affect any outstanding award without the written consent of the participant
holding the award.

For the fiscal year ended June 30, 2009, the four non-employee directors of the
Company, Josef A. Grunwald, Gary N. Jacobs, John C. Love and William J. Nance,
each received a grant of 1,140 shares of Common Stock pursuant to the 2007
Plan.


The Intergroup Corporation 2008 Restricted Stock Unit Plan

On December 3, 2008, the Board of Directors adopted, subject to shareholder
approval, a new equity compensation plan for its officers, directors and key
employees entitled, The InterGroup Corporation 2008 Restricted Stock Unit Plan
(the "RSU Plan"). The RSU Plan was approved and ratified by the shareholders on
February 18, 2009.

The RSU Plan authorizes the Company to issue restricted stock units ("RSUs") as
equity compensation to officers, directors and key employees of the Company on
such terms and conditions established by the Compensation Committee of the
Company. RSUs are not actual shares of the Company's common stock, but rather
promises to deliver common stock in the future, subject to certain vesting
requirements and other restrictions as may be determined by the Committee.
Holders of RSUs have no voting rights with respect to the underlying shares of
common stock and holders are not entitled to receive any dividends until the
RSUs vest and the shares are delivered. No awards of RSUs shall vest until at
least six months after shareholder approval of the Plan. Subject to certain
adjustments upon changes in capitalization, a maximum of 200,000 shares of the

                                    -82-
<PAGE>

common stock are available for issuance to participants under the RSU Plan.
The RSU Plan will terminate ten (10) years from December 3, 2008, unless
terminated sooner by the Board of Directors. After the RSU Plan is terminated,
no awards may be granted but awards previously granted shall remain outstanding
in accordance with the Plan and their applicable terms and conditions.

The shares to be delivered pursuant to the award of RSUs have not been
registered under the Securities Act of 1933, as amended (the "1933 Act").
Following approval of the RSU Plan by the stockholders, the Company may, but
shall not be obligated to, register the shares subject to the RSU Plan by
filing a registration statement on Form S-8 under the 1933 Act or any other
applicable law. Shares of stock issued pursuant to the Plan may bear an
appropriate restrictive legend as determined by the Committee.

Under the RSU Plan, the Compensation Committee also has the power and authority
to establish and implement an exchange program that would permit the Company to
offer holders of awards issued under prior shareholder approved compensation
plans to exchange certain options for new RSUs on terms and conditions to be
set by the Committee. The exchange program is designed to increase the
retention and motivational value of awards granted under prior plans. In
addition, by exchanging options for RSUs, the Company will reduce the number of
shares of common stock subject to equity awards, thereby reducing potential
dilution to stockholders in the event of significant increases in the value of
its common stock.

Pursuant to an exchange offer authorized by the Compensation Committee, a total
of 5,812 RSUs were issued to four holders of Non-Employee Director stock
options in exchange for a total of 36,000 stock options which were surrendered
to the Company on December 7, 2008. The number of RSUs issued was determined by
multiplying the number of options that were surrendered by the difference
between the exercise price of the options surrendered ($8.00) and the closing
price of the Company's common stock on December 5, 2008 of $9.54, with that
product divided by the closing price of the common stock on December 5, 2008.
The 5,812 RSUs issued pursuant to that exchange offer vest on August 19, 2009.
On December 15, 2008, the Compensation Committee authorized a similar exchange
offer to the Company's CEO, John Winfield, respecting 225,000 vested stock
options issued to him under the Key Employee Plan.  Pursuant to that exchange
offer, Mr. Winfield surrendered his 225,000 options to the Company on December
21, 2008 in exchange for 84,628 RSUs. The number of RSUs issued was based on
the difference between the exercise price of the options surrendered of $7.917
and the closing price of the Company's common stock on December 19, 2008 of
$12.69, using the same formula as the exchange offer to the holders of the Non-
Employee Director options. The RSUs issued to Mr. Winfield vest as follows:
September 10, 2009 - 54,628 shares; September 10, 2010 - 15,000 shares; and
September 10, 2011 - 15,000 shares. No stock option compensation expense was
recognized related to the exchange as the fair market value of the options
immediately prior to the exchange, approximated the fair value of the RSUs on
the day of issuance.
Pursuant to a further exchange offer authorized by the Compensation Committee,
a total of 4,775 RSUs were issued to five holders of Non-Employee Director
stock options in exchange for a total of 15,000 stock options which were
surrendered to the Company on June 30, 2009. The number of RSUs issued was
determined by multiplying the number of options that were surrendered by the
difference between the exercise price of the options surrendered ($8.17) and
the closing price of the Company's common stock on June 30, 2009 of $11.99,
with that product divided by the closing price of the common stock on June 30,
2009. The 4,775 RSUs issued pursuant to that exchange offer vest on January 7,
2010.

                                    -83-
<PAGE>

                          DIRECTOR COMPENSATION
                      Fiscal Year Ended June 30, 2009

                        Fees
                       Earned
                       or Paid        Stock        All Other
     Name             in Cash(1)     Awards(2)    Compensation      Total
-----------------     ---------     ----------    ------------     -------

Josef A. Grunwald     $22,000(3)    $36,480(7)              -      $58,480

Gary N. Jacobs        $16,000       $18,000(8)              -      $34,000

John C. Love          $66,000(4)    $18,000(9)              -      $84,000

William J. Nance      $68,000(5)    $18,000(10)             -      $86,000

John V. Winfield(6)
--------------

(1) Amounts shown include board retainer fees, committee fees and meeting
    fees.

(2) Amounts shown reflect value of 1,140 shares of Common Stock awarded on
    July 1, 2008 pursuant to the 2007 Stock Compensation Plan for Non-
    Employee Directors based on closing price of the Company's Common Stock
    of $15.78 on June 30, 2008.

(3) Mr. Grunwald also serves as a director of the Company's subsidiary,
    Portsmouth. This amount includes $6,000 in regular board fees paid
    to Mr. Grunwald by Portsmouth.

 (4) Mr. Love also serves as a director of the Company's subsidiaries, Santa
    Fe and Portsmouth. Amounts shown include $8,000 in regular board and audit
    committee fees paid by Santa Fe and $8,000 in regular board and audit
    committee fees paid by Portsmouth. These amounts also include $30,000 in
    special hotel committee fees paid by Portsmouth related to the oversight
    its Hotel asset.

(5) Mr. Nance also serves as a director of the Company's subsidiaries, Santa
    Fe and Portsmouth. Amounts shown include $8,000 in regular board and audit
    committee fees paid by Santa Fe and $8,000 in regular board and audit
    committee fees paid by Portsmouth. These amounts also include $30,000 in
    special hotel committee fees paid by Portsmouth related to the oversight
    its Hotel asset.

(6) As Chief Executive Officer, the Company's Chairman, John Winfield, was
    not paid any board, committee or meetings fees. Mr. Winfield did receive a
    a total of $12,000 in regular board fees from the Company's subsidiaries,
    which is reported on the Summary Compensation Table.

(7) Dollar amount includes compensation realized on the exercise of 12,000
    stock options. Does not include 955 RSUs issued in exchange for
    the surrender of 3,000 stock options to the Company on June 30, 2009, as no
    compensation expense related to the exchange was recognized for financial
    statement reporting purposes in accordance with FAS 123R as the fair
    market value of the options immediately prior to the exchange, approximated
    the fair value of the RSUs on the day of issuance. The 955 RSUs vest on
    January 7, 2010. As of June 30, 2009, Mr. Grunwald also had an aggregate of
    17,400 stock options outstanding.


                                    -84-
<PAGE>

 (8) Dollar amount does not include 969 RSUs issued in exchange for the
    surrender of 6,000 stock options on December 7, 2008 and 955 RSUs issued in
    exchange for the surrender of 3,000 stock options to the Company on June
    30, 2009, as no compensation expense related to the exchanges was
    recognized for financial statement reporting purposes in accordance with
    FAS 123R as the fair market value of the options immediately prior to the
    exchanges, approximated the fair value of the RSUs on the day of issuance.
    The 969 RSUs vest on August 19, 2009 and the 955 RSUs vest on January 7,
    2010. As of June 30, 2009, Mr. Jacobs also had an aggregate of 17,400
    stock options outstanding.

(9) Dollar amount does not include 969 RSUs issued in exchange for the
    surrender of 6,000 stock options on December 7, 2008 and 955 RSUs issued in
    exchange for the surrender of 3,000 stock options to the Company on June
    30, 2009, as no compensation expense related to the exchanges was
    recognized for financial statement reporting purposes in accordance with
    FAS 123R as the fair market value of the options immediately prior to the
    exchanges, approximated the fair value of the RSUs on the day of issuance.
    The 969 RSUs vest on August 19, 2009 and the 955 RSUs vest on January 7,
    2010. As of June 30, 2009, Mr. Love also had an aggregate of 17,400 stock
    options outstanding.

(10)Dollar amount does not include 1,937 RSUs issued in exchange for the
    surrender of 12,000 stock options on December 7, 2008 and 955 RSUs issued
    in exchange for the surrender of 3,000 stock options to the Company on June
    30, 2009, as no compensation expense related to the exchanges was
    recognized for financial statement reporting purposes in accordance with
    FAS 123R as the fair market value of the options immediately prior to the
    exchanges, approximated the fair value of the RSUs on the day of issuance.
    The 1,937 RSUs vest on August 19, 2009 and the 955 RSUs vest on January 7,
    2010. As of June 30, 2009, Mr. Nance also had an aggregate of 17,400 stock
    options outstanding.


Compensation of Directors

Each non-employee director receives an annual cash retainer in the amount of
$16,000, to be paid in equal quarterly payments. With the exception of members
of the Audit Committee, non-employee directors will not receive any additional
fees for attending Board or Committee meetings, but will be entitled to
reimbursement of their reasonable expenses to attend such meetings. Members of
the Audit Committee are paid a fee of $1,000 per quarter, with the Chair of
that Committee to receive $1,500 per quarter. As an executive officer, the
Company's Chairman has elected to forego his annual board fees.

Non-employee directors are also eligible for grants of equity compensation
under the Company's 2007 Plan and RSU Plan. Pursuant to the 2007 Plan, each
non-employee director is entitled to an annual grant of a number of shares of
Common Stock of the Company equal in value to $18,000 based on the fair market
value of the Common Stock on the date of grant. Non-employee directors may also
be eligible to participate in exchange offers as may be authorized by the
Compensation Committee under the RSU Plan to exchange previously issued stock
options for RSUs.


Change in Control or Other Arrangements

Except for the foregoing, there are no other arrangements for compensation of
Directors and there are no employment contracts between the Company and its
Directors or any change in control arrangements.

                                    -85-
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

The following table sets forth, as of September 10, 2009, certain information
with respect to the beneficial ownership of Common Stock of the Company by (i)
those persons or groups known by the Company to own more than five percent of
the outstanding shares of Common Stock, (ii) each Director and Executive
Officer, and (iii) all Directors and Executive Officers as a group.


Name and Address of           Amount and Nature
Beneficial Owner (1)         of Beneficial Owner(2)     Percentage(3)
--------------------        ----------------------     -------------

John V. Winfield                1,443,581                   60.3%

Josef A. Grunwald                 128,084(3)                 5.3%

William J. Nance                   57,962(3)                 2.4%

Gary N. Jacobs                     25,972(3)(4)              1.1%

John C. Love                       22,597(3)                 0.9%

David C. Gonzalez                  28,500(5)                 1.2%

Michael G. Zybala                       0                      *

David T. Nguyen                         0                      *

All Directors and
Executive Officers as a
Group (8 persons)               1,706,696                   68.9%
------------------
*  Ownership does not exceed 1%.

(1)  Unless otherwise indicated, the address for the persons listed is
820 Moraga Drive, Los Angeles, CA 90049.

(2) Unless otherwise indicated and subject to applicable community property
laws, each person has sole voting and investment power with respect to the
shares beneficially owned.

(3) Percentages are calculated on the basis of 2,394,109 shares of Common Stock
outstanding at September 10, 2009, plus any securities that person has the
right to acquire within 60 days pursuant to options, warrants, conversion
privileges or other rights.  The following options are included in director's
shares:  Josef A. Grunwald-17,400; William J. Nance-17,400; Gary N. Jacobs-
17,400; and John C. Love-17,400.

(4) Other than his options, all shares of Mr. Jacobs are held by the Gary and
Robin Jacobs Family Trust.

(5) Includes 12,750 shares of which Mr. Gonzalez has the right to acquire
pursuant to options.

                                    -86-
<PAGE>

Changes in Control Arrangements

There are no arrangements that may result in a change in control of the
Company.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

The following table sets forth information as of June 30, 2009, with respect to
compensation plans (including individual compensation arrangements) under which
equity securities of the Company are authorized for issuance, aggregated as
follows:


Plan category       Securities to     Weighted average   Remaining available
                      be issued       exercise price     for future issuance
                    upon exercise     of outstanding        under equity
                    of outstanding       options         compensation plans
                       options,        warrants and         (excluding
                     warrants and         rights             securities
                       rights                               reflected in
                                                             column (a))
                         (a)                (b)                 (c)
-------------------  ------------      -------------     -------------------

Equity compensation
plans approved by
security holders      197,215(1)           $11.86             153,877(2)

----------------------------------------------------------------------------

Equity compensation
plans not approved
by security holders      None               N/A                 None

----------------------------------------------------------------------------
     Total            197,215(1)           $11.86             153,877(2)
----------------------------------------------------------------------------

(1) There were 102,000 stock options outstanding as of June 30, 2009. Also
    included are 95,215 Restricted Stock Units issued pursuant to the 2008
    RSU Plan that were not vested as of June 30, 2009.

(2) Reflects the weighted average exercise price of all outstanding options.

(3) As of June 30, 2009, the Company had 49,092 shares of Common Stock
    available for future issuance pursuant to the 2007 Stock Compensation Plan
    for Non-Employee Directors. Pursuant to the 2007 Plan, each non-employee
    director will receive, on July 1 of each year, an annual grant of a number
    of shares of Common Stock of the Company equal in value to $18,000 based on
    the fair market value of the Common Stock on the date of grant. The Company
    also had 104,785 RSUs available for future issuance under the 2008 RSU
    Plan. There were no stock options available for future issuance as both of
    the Company's stock option plans expired in fiscal 2009.

                                    -87-
<PAGE>

Item 13.  Certain Relationships and Related Transactions, and
          Director Independence

On December 4, 1998, the Administrative and Compensation Committee authorized
the Company to obtain whole life and split dollar insurance policies covering
the Company's President and Chief Executive Officer, Mr. Winfield.  During
fiscal 2009 and 2008, the Company paid annual premiums in the amount of
approximately $85,000 for the split dollar insurance policy owned by, and the
beneficiary of which is, a trust for the benefit of Mr. Winfield's family.
The Company has a secured right to receive, from any proceeds of the policy,
reimbursement of all premiums paid prior to any payments to the beneficiary.

On June 30, 1998, the Company's Chairman and President entered into a voting
trust agreement with the Company giving the Company the power to vote his 4.0%
interest in the outstanding shares of the Santa Fe common stock.

As Chairman of the Securities Investment Committee, the Company's President and
Chief Executive officer, John V. Winfield, oversees the investment activity of
the Company in public and private markets pursuant to authority granted by the
Board of Directors.  Mr. Winfield also serves as Chief Executive Officer and
Chairman of Santa Fe and Portsmouth and oversees the investment activity of
those companies.  Depending on certain market conditions and various risk
factors, the Chief Executive Officer, his family, Santa Fe and Portsmouth may,
at times, invest in the same companies in which the Company invests.  The
Company encourages such investments because it places personal resources of the
Chief Executive Officer and his family members, and the resources of Santa Fe
and Portsmouth, at risk in connection with investment decisions made on behalf
of the Company.  Under the direction of the Securities Investment Committee,
the Company has instituted certain modifications to its procedures to reduce
the potential for conflicts of interest.

The Company, its subsidiary Santa Fe and Santa Fe's subsidiary, Portsmouth,
have established performance based compensation programs for Mr. Winfield's
management of the securities portfolios of those companies.  The performance
based compensation program was approved by the disinterested members of the
respective Boards of Directors of the Company and its subsidiaries. No
performance bonus compensation was paid to Mr. Winfield for the fiscal years
ended June 30, 2009 and 2008.

In August 2007, Portsmouth agreed to make a $973,000 equity investment in the
Company's wholly subsidiary, Intergroup Uluniu, Inc., a Hawaii corporation
("Uluniu") in exchange for a 50% equity position in Uluniu. Uluniu owns an
approximately two-acre parcel of unimproved land located in Kihei, Maui, Hawaii
which is held for development. Portsmouth's investment in Uluniu represents an
amount equal to the costs paid by InterGroup for the acquisition and carrying
costs of the property through August 2007. As of September 5, 2007, $758,000 of
the investment amount was paid by Portsmouth and the proceeds were used by
Uluniu to retire the mortgage on the property in the approximate amount of
$756,000. On June 25, 2008, the balance of $215,000 was paid by Portsmouth to
Uluniu.

Director Independence

InterGroup's common stock is listed on the NASDAQ Capital Market tier of the
NASDAQ Stock Market LLC ("NASDAQ").  InterGroup is a Smaller Reporting Company
under the rules and regulations of the SEC.  The Board of Directors of
InterGroup currently consists of five members. With the exception of the
Company's President and CEO, John V. Winfield, all of InterGroup's Board of

                                    -88-
<PAGE>

Directors consists of "independent" directors as independence is defined by the
applicable rules of the SEC and NASDAQ. There are no members of the Company's
compensation, nominating or audit committees that do not meet those
independence standards.


Item 14.  Principal Accounting Fees and Services.

Audit Fees - The aggregate fees billed for each of the last two fiscal years
ended June 30, 2009 and 2008 for professional services rendered by Burr, Pilger
& Mayer, LLP, the independent registered public accounting firm for the audit
of the Company's annual financial statements and review of financial statements
included in the Company's Form 10-Q reports or services normally provided by
the independent registered public accounting firm in connection with statutory
and regulatory filings or engagements for those fiscal years, were as follows:

                                              Fiscal Year
                                       -------------------------
                                         2009             2008
                                       --------         --------
               Audit Fees              $286,000         $277,000
               Audit Related Fees             -                -
               Tax Fees                       -                -
               All Other Fees                 -                -
                                       --------         --------
                   TOTAL:              $286,000         $277,000
                                       ========         ========


Audit Committee Pre-Approval Policies

The Audit Committee shall pre-approve all auditing services and permitted non-
audit services (including the fees and terms thereof) to be performed for the
Company by its independent registered public accounting firm, subject to any de
minimus exceptions that may be set for non-audit services described in Section
10A(i)(1)(B) of the Exchange Act which are approved by the Committee prior to
the completion of the audit.  The Committee may form and delegate authority to
subcommittees consisting of one or more members when appropriate, including the
authority to grant pre-approvals of audit and permitted non-audit services,
provided that decisions of such subcommittee to grant pre-approvals shall be
presented to the full Committee at its next scheduled meeting. All of the
services described herein were approved by the Audit Committee pursuant to its
pre-approval policies.

None of the hours expended on the independent registered public accounting
firms' engagement to audit the Company's financial statements for the most
recent fiscal year were attributed to work performed by persons other than the
independent registered public accounting firm's full-time permanent employees.

                                    -89-
<PAGE>

                              PART IV

Item 15.  Exhibits, Financial Statement Schedules.

  (a)(1) Financial Statements

   The following financial statements of the Company are included in Part II,
   Item 8 of this report at pages 34 through 73:

         Report of Independent Registered Public Accounting Firm

         Consolidated Balance Sheets - June 30, 2009 and 2008 (Restated)

         Consolidated Statements of Operations for Years Ended
          June 30, 2009 and 2008 (Restated)

         Consolidated Statements of Shareholders' Equity for
          Years Ended June 30, 2009 and 2008 (Restated)

         Consolidated Statements of Cash Flows for Years Ended June 30,
          2009 and 2008 (Restated)

         Notes to the Consolidated Financial Statements (Restated)


  (a)(2) Financial Statement Schedules

         All other schedules for which provision is made in Regulation S-X
         have been omitted because they are not required or are not applicable
         or the required information is shown in the consolidated financial
         statements or notes to the consolidated financial statements.


  (a)(3) Exhibits

Set forth below is an index of applicable exhibits filed with this report
according to exhibit table number.

Exhibit No.                           Description
-----------   -----------------------------------------------------------

3. (i) Articles of Incorporation

3.1    Certificate of Incorporation, dated September 11, 1985, incorporated
       by reference to Exhibit 3.1 of the Company's Registration Statement on
       Form S-4, filed on September 6, 1985 (Registration No. 33-00126) and
       Amendment 1 to that Registration Statement filed on October 23, 1985.

3.2    Restated Certificate of Incorporation, dated March 9, 1998,
       incorporated by reference to Exhibit 3 of the Company's Amended
       Quarterly Report on Form 10-QSB/A for the period ended March 31, 1998,
       as filed on May 19, 1998.

3.3    Certificate of Amendment to Certificate of Incorporation, dated
       October 2, 1998, incorporated by reference to Exhibit 3 of the
       Company's Quarterly report of Form 10-QSB for the period ended
       September 30, 1998, as filed on November 11, 1998.

                                    -90-
<PAGE>

3.4    Certificate of Amendment of Certificate of Incorporation filed with
       the Delaware Secretary of State on August 6, 2007, incorporated by
       reference to Exhibit 3.4 of the Company's Annual Report on Form 10-KSB
       for the year ended June 30, 2007 as filed on September 28, 2007.

3 (ii) By-Laws

3.5    Amended and Restated By-Laws of The InterGroup Corporation, effective
       as of December 10, 2007, incorporated by reference to Exhibit 3.1 to
       the Company's Current Report on Form 8-K as filed on December 12, 2007.

4.     Instruments defining the rights of security holders, including
       indentures *

9.     Voting Trust Agreement

       Voting Trust Agreement dated June 30, 1998 between John V. Winfield
       and The InterGroup Corporation is incorporated by reference to the
       Company's Annual Report on Form 10-KSB filed with the Securities and
       Exchange Commission on September 28, 1998.

10.    Material Contracts

10.1   1998 Stock Option Plan for Non-Employee Directors approved by the
       Board of Directors on December 8, 1998 and ratified by the
       shareholders on January 27, 1999 (incorporated herein by reference to
       the Company's Proxy Statement on Schedule 14A filed with the Commission
       on December 21, 1998).

10.2   1998 Stock Option Plan for Selected Key Officers, Employees and
       Consultants approved by the Board of Directors on December 8, 1998
       and ratified by the shareholders on January 27, 1999 **

10.3   The InterGroup Corporation 2007 Stock Compensation Plan for Non-
       Employee Directors (incorporated by reference to the Company's Proxy
       Statement on Schedule 14A filed with the Commission on January 26,
       2007).

10.4   2008 Amendment to the Justice Investors Limited Partnership Agreement,
       dated December 1, 2008 (incorporated by reference to Exhibit 10.1
       to the Company's Form 10-Q Report for the quarterly period ended
       December 31, 2008 filed with the Commission on February 12, 2009).

10.5   General Partner Compensation Agreement, dated December 1, 2008,
       (incorporated by reference to Exhibit 10.2 to Company's Form 10-Q Report
       for the quarterly period ended December 31, 2008, filed with the
       Commission on February 12, 2009).

10.6   The InterGroup Corporation 2008 Restricted Stock Unit Plan, adopted
       by the Board of Directors on December 3, 2008, and ratified by the
       shareholders on February 18, 2009 (incorporated by reference to the
       Company's Proxy Statement on Schedule 14A, filed with the Commission
       on January 21, 2009).

10.7   Restricted Stock Unit Agreement, dated February 18, 2009, between The
       InterGroup Corporation and John V. Winfield (filed herewith).

14.    Code of Ethics (filed herewith)

                                    -91-
<PAGE>

21.    Subsidiaries (filed herewith)

23.1   Consent of Independent Registered Public Accounting Firm - Burr
       Pilger & Mayer LLP (filed herewith)

31.1   Certification of Principal Executive Officer of Periodic Report
       Pursuant to Rule 13a-14(a) and Rule 15d-14(a) (filed herewith).

31.2   Certification of Principal Financial Officer of Periodic Report
       Pursuant to Rule 13a-14(a) and Rule 15d-14(a) (filed herewith)

32.1   Certification of Principal Executive Officer Pursuant to 18
       U.S.C. Section 1350 (filed herewith).

32.2   Certification of Principal Financial Officer Pursuant to 18
       U.S.C. Section 1350. (filed herewith).

* All Exhibits marked by one asterisk are incorporated herein by reference to
the Trust's Registration Statement on Form S-4 as filed with the Securities and
Exchange Commission on September 6, 1985, Amendment No. 1 to Form S-4 as filed
with the Securities and Exchange Commission on October 23, 1985, Exhibit 14 to
Form 8 Amendment No. 1 to Form 8 filed with the Securities & Exchange
Commission November 1987 and Form 8 Amendment No. 1 Item 4 filed with the
Securities & Exchange Commission October 1988.

                                    -92-
<PAGE>

                                SIGNATURES
                                ----------

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this amended report to be signed on its behalf by the undersigned,
thereunto duly authorized.


Date: October 14, 2009           by /s/ David T. Nguyen
      ------------------            ---------------------------------------
                                    David T. Nguyen, Treasurer and Controller
                                    Controller (Principal Accounting Officer)


                                    -93-