|6 Months Ended|
Mar. 31, 2012
|Subsequent Events [Abstract]|
Note 12. Subsequent Events
Shareholder Derivative Action
On April 1, 2012, the parties to the shareholder derivative action, originally filed by Baxter Troutman against John R. Alexander, Chairman of the Board of Directors, and JD Alexander, Vice Chairman of the Board of Directors and Chief Executive Officer, and which Alico Inc., was a nominal defendant, entered into a settlement agreement.
The settlement agreement (the "Agreement") contained the following provisions:
On May 4, 2012, the Circuit Court of the 10th Judicial Circuit in Polk County, FL (the "Court") approved the Agreement. The Company, by determination of the Special Litigation Committee of its Board of Directors, filed a motion seeking recovery of attorney fees and costs incurred in its defense. The Court will retain jurisdiction and will hear the motion filed by the Company.
On April 23, 2012, the Company announced a contract for sale involving two parcels of land totaling approximately 4,020 acres in Polk County, FL. The sales prices of the two properties total approximately $10.1 million and will result in pre-tax gains totaling approximately $9.2 million expected to be recorded in the third quarter of fiscal 2012. The purchasers of the parcels of land are Ben Hill Griffin, III, the brother-in-law of John R. Alexander, Alico's Chairman of the Board and Ben Hill Griffin, Inc. The transactions were between related parties; as such, they were referred to and approved by the Audit Committee, which is comprised entirely of independent directors. Both parcels were considered to be surplus to our agricultural operations.
The first parcel is located in Frostproof, FL totaling approximately 3,635 acres. The purchase price is approximately $9.1 million or $2,500 per acre. Alico recorded a deposit for the parcel of $200,000. The sales contract was entered into on April 13, 2012, with Ben Hill Griffin III and will close no later than June 12, 2012, with the deed and possession delivered on said date.
The second parcel of land is also located in Frostproof, FL totaling approximately 385 acres. The purchase price is approximately $1.0 million or $2,750 per acre. Alico recorded a deposit for the parcel of $50,000. The sales contract was entered into on April 16, 2012 with Griffin and will close no later than June 12, 2012, with deed and possession delivered on said date.
On April 30, 2012, the Company executed documents prepared by the IRS to settle the income tax examinations of Alico, Agri-Insurance and Alico-Agri for the tax years 2005 through 2007. The IRS' execution of these documents is pending. Federal income tax due as a result of the settlement is $613 thousand. We made a payment of $665 thousand on December 11, 2011 prior to the settlement, and as a result, we overpaid by approximately $52 thousand. Federal interest due is subject to final IRS computation but is estimated to be approximately $400 thousand. State taxes, interest and penalties due are estimated to be approximately $400 thousand. See Note 5. Income Taxes for further discussion.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.