Annual report pursuant to section 13 and 15(d)

Subsequent Events

Subsequent Events
12 Months Ended
Sep. 30, 2011
Subsequent Events [Abstract]  
Subsequent Events

Note 18. Subsequent Events

On November 22, 2011, the Company reached an agreement in principle with the IRS to settle its outstanding tax issues from tax years 2005 through 2007 which included the following: (i) Agri-Insurance's ability to elect to be treated as a United States taxpayer during the years under examination; and (ii) Alico-Agri's ability to recognize income from real estate sales under the installment method for two specific transactions by asserting that Alico-Agri was a dealer in real estate during the years under examination. The settlement provides that Agri-Insurance was eligible to elect to be treated as a United States taxpayer. No determination was made as to whether Alico or Alico-Agri was a dealer in real estate; however, for the two sales transactions at issue, the Company agreed to treat one-third of the taxable gain as ordinary income taxable in the year of sale with the remaining two-thirds treated as capital gain eligible for installment sale treatment. Federal and state taxes and interest due as a result of the settlement have been accrued as of September 30, 2011, in the amounts of $0.9 million and $0.7 million, respectively. Federal penalties of $15.3 million were considered by IRS Appeals and have been waived. The remaining $1.3 million in penalties have not yet been considered by IRS Appeals to date but waiver of these penalties would be consistent with the issues resolved in the settlement. Taxes and interest due are subject to final computation and confirmation by the IRS. The settlement does not preclude Alico from using the installment sale method with respect to future transactions.

JD Alexander and John R. Alexander filed a motion to dismiss the shareholder derivative action complaint filed by Baxter Troutman. On November 21, 2011, the Circuit Court in Polk County, Florida issued an order dismissing the shareholder derivative action. The court dismissed the complaint for failing to state a cause of action. The complaint was dismissed without prejudice and can be amended no later than December 16, 2011.