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COMMITMENTS AND CONTINGENCIES
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3 Months Ended |
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Mar. 31, 2015
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| COMMITMENTS AND CONTINGENCIES [Abstract] | |
| COMMITMENTS AND CONTINGENCIES |
17. COMMITMENTS AND CONTINGENCIES
Guarantees –
On October 24, 2010, we executed a limited Guarantee in favor of the Saudi Industrial Development Fund (“SIDF”) whereby we agreed to guaranty up to 41% of the SIDF loan to AMAK in the principal amount of 330.0 million Saudi Riyals (US$88.0 million) (the “Loan”). The term of the loan is through June 2019. As a condition of the Loan, SIDF required all shareholders of AMAK to execute personal or corporate Guarantees; as a result, our guarantee is for approximately 135.33 million Saudi Riyals (US$36.1 million). The loan was necessary to continue construction of the AMAK facilities and provide working capital needs. We received no consideration in connection with extending the guarantee and did so to maintain and enhance the value of its investment. The total amount outstanding to the SIDF at March 31, 2015, was 309.7 million Saudi Riyals (US$82.6 million).
Litigation -
Mr. Hatem El Khalidi filed suit against the Company in Texas alleging breach of contract of his postretirement agreement and other claims in 2013. During 2013 and 2014 the District Court, Appeals Court and Supreme Court of Texas agreed with the dismissal of the claims and counterclaims for want of prosecution. On May 1, 2014, Mr. El Khalidi refiled his lawsuit. The case is currently pending. On April 6, 2015, we received Mr. El-Khalidi’s Notice of Partial Nonsuit (Defamation Claim Only). We believe that the remaining claims are unsubstantiated and plan to vigorously defend the case. Liabilities of approximately $1.0 million remain recorded, and the options will continue to accrue in accordance with their own terms until all matters are resolved.
On September 14, 2010, South Hampton received notice of a lawsuit filed in the 58th Judicial District Court of Jefferson County, Texas which was subsequently transferred to the 11th Judicial District Court of Harris County, Texas. The suit alleges that the plaintiff became ill from exposure to asbestos. There are approximately 44 defendants named in the suit. South Hampton has placed its insurers on notice of the claim and plans to vigorously defend the case. No accrual has been recorded for this claim.
Environmental Remediation -
In 2008 the US Bureau of Land Management raised the issue of mine tailings leaving the Pioche Ely Valley Mines, Inc. property and contaminating the adjacent land owned by BLM and other neighbors. After investigating, the Company determined it could be cleaned up and contained for a reasonable amount. Approximately $179,000 was expended as a loan to PEVM in return for interest in selected patented mining claims. No-further-action letters were subsequently received from the BLM and the Nevada division of Environmental Protection. An accrual of $350,000 was recorded by PEVM in 2010 for the remediation efforts and approximately $179,000 was expended in 2013 and 2014. The remaining accrual of $171,000 was reversed during 2014. The matter is considered closed.
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