Cemex 2013 Annual Report Download - page 120
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Please find page 120 of the 2013 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to the consolidated financial statements
• On July 24, 2013 a Petition for Damages and Injunctive Relief was led by the South Louisiana Flood Protection Authority-East
(“SLFPAE”)in theCivil DistrictCourt for theParishofOrleans,StateofLouisiana, againstapproximately100defendantsincluding
CEMEX,Inc.SLFPAEisseekingcompensationforandtherestorationofcertaincoastallandsnearNewOrleansallegedtohavebeen
damagedbyactivitiesrelatedtooilandgasexplorationandproductionsincetheearly1900’s.CEMEX,Inc.,whichwaspreviouslynamed
Southdown,Inc.,mayhaveacquiredliabilities,totheextenttheremaybeany,inconnectionwithoilandgasoperationsthatwere
divestedinthelate1980’s.ThematterwasrecentlyremovedtotheUnitedStatesDistrictCourtfortheEasternDistrictofLouisianaand
amotionbythePlaintiffstoremandtoStateCourtispending.AsofDecember31,2013,CEMEXdoesnothassufcientinformation
toassessthelikelihoodofanadverseresultor,becauseofthenumberofdefendants,thepotentialdamageswhichcouldbeborneby
CEMEX,Inc.,ifany,orifsuchdamages,ifany,wouldhaveornotamaterialadverseimpactonCEMEX’sresultsofoperations,liquidity
ornancialcondition.
• OnSeptember13,2012,therstinstancecourtofAssiutinEgyptissuedajudgment(the“FirstInstanceJudgment”)to:(i)annulthe
SharePurchaseAgreementsignedinNovember1999betweenCEMEXandstate-ownedMetallurgicalIndustriesCompany(“MIC”)
pursuanttowhichCEMEXacquiredacontrollinginterestinAssiutCementCompany(“ACC”);and(ii)reinstateformeremployeestotheir
formerjobsatACC.TheFirstInstanceJudgmentwasnotiedtoACConSeptember19,2012.OnOctober18,2012andOctober20,
2012,ACCandMIC,respectively,ledappealsofthedecisionwiththeAppealsCourtinAssiut(the“AppealsCourt”)ofhearingswith
theAppealsCourtwereheldonDecember19,2012,January22,2013,April16,2013,June16,2013,September14,2013,October
23,2013andNovember17,2013.IntheNovember17,2013hearingtheAssiutcourtdecidedtojointheappealsledbyACCand
MICandadjournedthesessiontoJanuary20,2014.AsofDecember31,2013,CEMEXisnotabletoassessthelikelihoodofanadverse
result,butifadverselyresolved,suchresolutionmayhaveamaterialadverseimpactonCEMEX’snancialresultsofoperations,liquidity
ornancialcondition.
• OnJune21,2012,oneofCEMEX’ssubsidiariesinIsraelwasnotiedaboutanapplicationfortheapprovalofaclassactionsuitagainst
it.Theapplication,ledbyahomeownerwhobuilthishousewithconcretesuppliedbyCEMEXinOctoberof2010,claimsthatthe
concretesuppliedtohimdidnotmeetwiththe“IsraelStandardforConcreteStrengthNo.118”andthatasaresultCEMEXacted
unlawfullytowardallofitscustomerswhoreceivedconcretethatdidnotcomplywiththeIsraelistandardrequirements.Asperthe
application,theplaintiffclaimsthatthesupplyoftheallegednon-conformingconcretehascausednancialandnon-nancialdamages
tothosecustomers,includingtheplaintiff.CEMEXpresumesthattheclassactionwouldrepresenttheclaimof alltheclientswho
purchasedtheallegednon-conformingconcretefromitssubsidiaryinIsraelduringthepast7years,thelimitationperiodaccordingto
applicablelawsinIsrael.Thedamagesthatcouldbesoughtamounttoapproximately276millionIsraeliShekel(US$80or$1,038).
CEMEX’ssubsidiarysubmittedaformalresponsetothecorrespondingcourt.Bothpartiespresentedtheirpreliminaryargumentsina
hearingheldonNovember4,2013;thenexthearinghasbeenscheduledforFebruary10,2014.Atthisstage,CEMEXbelievesthe
applicationisvexatiousandshouldbedismissedwithoutanyexpensetoCEMEX.AsofDecember31,2013,CEMEXisanalyzingthe
legalstrategytobeemployedandisnotabletoassessthelikelihoodoftheclassactionapplicationbeingapprovedor,ifapproved,of
anadverseresult,butifadverselyresolved,CEMEXdoesnotbelievethenalresolutionswouldhaveamaterialadverseimpactonits
resultsofoperations,liquidityandnancialcondition.
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