Related Party Transactions
|6 Months Ended|
Mar. 31, 2012
|Related Party Transaction [Abstract]|
|Related Party Transaction||
Note 10. Related Party Transaction
Atlantic Blue Group, Inc.
Atlanticblue owns approximately 51% of Alico's common stock. By virtue of its ownership percentage, Atlanticblue is able to elect all of the directors and, consequently, control Alico. Directors which also serve on Atlanticblue's board are referred to as "affiliated directors". Atlanticblue issued a letter dated December 3, 2009, reaffirming its commitment to maintain a majority of independent directors (which may include affiliated directors) on Alico's board. A director is considered independent if the Board makes an affirmative determination that (i) the director has no relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities as a director and (ii) the director has no prohibited relationships with the registered company or its Executive Officers during the preceding thirty-six months from the determination.
John R. Alexander, a major shareholder in Atlanticblue, serves as Chairman of the Company's Board of Directors. Mr. Alexander's son, JD Alexander, resigned March 31, 2012, as the President and Chief Executive Officer of Atlanticblue but continues to serve as the Chairman of the Atlanticblue Board of Directors. In February 2010, JD Alexander was appointed Alico's President and Chief Executive Officer, and he serves on Alico's Board of Directors. Robert E. Lee Caswell, John R. Alexander's son-in-law, serves on the Alico Board of Directors, as does Robert J. Viguet, Jr., who is also a Director of Atlanticblue.
Effective July 1, 2008, the Company's Board of Directors approved an unaccountable expense allowance of $5 thousand per month to Scenic Highlands Enterprises LLC. The Company's former Chief Executive Officer and current Chairman of the Board, John R. Alexander, is the owner and Chief Executive Officer of Scenic Highlands Enterprises, LLC. Per the Board's Action by Written Consent, payments are to be used for office space, an administrative assistant's salary and utilities. The agreement ended June 30, 2011. Alico paid Scenic Highlands Enterprises, LLC $15 thousand and $30 thousand for the three and six months ended March 31, 2011, in accordance with this agreement.
Effective July 1, 2008, the Board approved a transition, consulting, severance and non-compete agreement with John R. Alexander providing for total payments of $600 thousand over a three year period. The payments ended June 30, 2011. Mr. Alexander was paid approximately $38 thousand and $75 thousand in accordance with this agreement during the three and six months ended March 31, 2011.
Former director Baxter Troutman filed a derivative shareholder suit against John R. Alexander and JD Alexander. The Company is reimbursing Messrs. Alexander for legal fees to defend themselves against the suit in accordance with the Board's indemnification agreement. All reimbursements are approved by the Special Committee of the Board comprised of four independent directors. Reimbursements for litigation were $71 thousand and $79 thousand on behalf of John R. Alexander and $69 thousand and $182 thousand on behalf of JD Alexander for the three and six months ended March 31, 2012, respectively. Reimbursements for litigation were $40 thousand and $68 thousand on behalf of John R. Alexander and $29 thousand and $48 thousand on behalf of JD Alexander for the three and six months ended March 31, 2011, respectively.
During the three and six months ended March 31, 2012, Bowen marketed no boxes and 1,344 boxes of fruit for Alexander Properties at no value and $19 thousand, respectively. During the three and six months ended March 31, 2011, Bowen marketed no boxes and 1,454 boxes of fruit from Alexander Properties at no value and $17 thousand, respectively. Alexander Properties is a company owned by John R. Alexander and JD Alexander.
Bowen is currently marketing citrus fruit from Tri County Groves, LLC, a wholly owned subsidiary of Atlanticblue. During the three and six months ended March 31, 2012, Bowen marketed 133,943 and 190,417 boxes of fruit, for approximately $1,073 thousand and $1,627 thousand, respectively. During the three and six months ended March 31, 2011, Bowen marketed 32,726 and 147,740 boxes of fruit, for approximately $273 thousand and $1,340 thousand, respectively.
Ben Hill Griffin, Inc.
Citrus revenues of $254 thousand and $374 thousand were recognized for a portion of citrus crops sold under a marketing agreement with Ben Hill Griffin, Inc. ("Griffin") for the three and six months ended March 31, 2012, respectively. For the three and six months ended March 31, 2011, citrus revenues from sales to Griffin under the marketing agreement were $171 thousand and $892 thousand, respectively. Griffin and its subsidiaries are controlled by Ben Hill Griffin, III, the brother-in-law of John R. Alexander, Alico's Chairman. Accounts receivable in the Condensed Consolidated Balance Sheets include amounts due from Griffin of $351 thousand and $152 thousand at March 31, 2012 and September 30, 2011, respectively. These amounts represent estimated revenues to be received periodically under pooling agreements as the sale of pooled products is completed. Harvesting, marketing and processing costs for fruit sold through Griffin totaled $52 thousand for both the three and six months ended March 31, 2012 and $60 thousand and $228 thousand for the three and six months ended March 31, 2011.
Alico purchases fertilizer and other miscellaneous supplies, services and operating equipment from Griffin, on a competitive bid basis, for use in its cattle, sugarcane, sod and citrus operations. Such purchases totaled $509 thousand and $817 thousand for the three and six months ended March 31, 2012 and $536 thousand and $778 thousand for the three and six months ended March 31, 2011, respectively. The accompanying Condensed Consolidated Balance Sheets include accounts payable to Griffin for fertilizer and other crop supplies totaling approximately $11 thousand and $41 thousand at March 31, 2012 and September 30, 2011, respectively. See Note 12. Subsequent Events for discussion regarding the sale of two parcels of land during April 2012 to Ben Hill Griffin III and Griffin.
The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef