INTL FCStone 2012 Annual Report Download - page 39
Download and view the complete annual report
Please find page 39 of the 2012 INTL FCStone 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.INTL FCSTONE INC.Form10K 23
PART I
ITEM 3 Legal Proceedings
ITEM 2 Properties
e Company maintains o ces in New York, New York;
Winter Park, Florida; West Des Moines, Iowa; Chicago, Illinois;
Kansas City, Missouri; St. Louis, Missouri; Omaha, Nebraska;
Minneapolis, Minnesota; Bloomington, Illinois; Miami, Florida;
New Smyrna Beach, Florida; Indianapolis, Indiana; Spirit Lake,
Iowa; Bowling Green, Ohio; Nashville, Tennessee; Golden,
Colorado; Topeka, Kansas; Winnipeg, Canada; Buenos Aires,
Argentina; Campinas, Brazil; Sao Paulo, Brazil; Maringa, Brazil;
Porto Alegre, Brazil; Goianai, Brazil; Recife, Brazil; Asuncion,
Paraguay; Montevideo, Uruguay; London, United Kingdom;
Dublin, Ireland; Dubai, United Arab Emirates; Singapore,
Singapore; Beijing and Shanghai, China; and Sydney, Australia.
All of our o ces and other principal business properties are
leased, except for the space in Buenos Aires, which we own.
We believe that our leased and owned facilities are adequate to
meet anticipated requirements for our current lines of business.
ITEM 3 Legal Proceedings
Certain conditions may exist as of the date the nancial statements
are issued, which may result in a loss to the Company but
which will only be resolved when one or more future events
occur or fail to occur. We assess such contingent liabilities, and
such assessment inherently involves an exercise of judgment.
In assessing loss contingencies related to legal proceedings that
are pending against the Company or unasserted claims that
may result in such proceedings, our legal counsel evaluates the
perceived merits of any legal proceedings or unasserted claims
as well as the perceived merits of the amount of relief sought or
expected to be sought therein.
If the assessment of a contingency indicates that it is probable
that a material loss had been incurred at the date of the nancial
statements and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company’s nancial
statements. If the assessment indicates that a potentially material
loss contingency is not probable, but is reasonably possible, or
is probable but cannot be estimated, then the nature of the
contingent liability, together with an estimate of the range of
possible loss if determinable and material, would be disclosed.
Neither accrual nor disclosure is required for loss contingencies
that are deemed remote. We accrue legal fees related to contingent
liabilities as they are incurred.
In addition to the matters discussed below, from time to time
and in the ordinary course of business, we are involved in various
legal actions and proceedings, including tort claims, contractual
disputes, employment matters, workers’ compensation claims
and collections. We carry insurance that provides protection
against certain types of claims, up to the policy limits of our
insurance. During the years ended September 30, 2012 and
2011, loss contingency accruals, not having a material impact on
the consolidated nancial statements, have been recorded. In the
opinion of management, possible exposure in these matters in
excess of the amounts accrued, is not material to the Company’s
earnings, nancial position, or liquidity.
e following is a summary of signi cant legal matters involving
the Company.
Securities Litigation
FCStone and certain o cers of FCStone were named as defendants
in an action led in the United States District Court for the
Western District of Missouri on July 15, 2008. A consolidated
amended complaint (“ CAC” ) was subsequently led on September
25, 2009. As alleged in the CAC, the action purports to be
brought as a class action on behalf of purchasers of FCStone
common stock between November 15, 2007 and February 24,
2009. e CAC seeks to hold defendants liable under Section
10(b) and Section 20(a) of the Securities Exchange Act of 1934
and concerns disclosures included in FCStone’s scal year 2008
public lings. Speci cally, the CAC relates to FCStone’s public
disclosures regarding an interest rate hedge, a bad debt expense
arising from unprecedented events in the cotton trading market,
and certain disclosures beginning on November 3, 2008 related
to losses it expected to incur arising primarily from a customer
energy trading account. FCStone and the named o cers moved
to dismiss the action. e parties to the litigation reached an
agreement in principle to settle this matter during May 2012.
e proposed settlement would be at no cost to the Company
after consideration of insurance, and is subject to approval by
the court.
In August 2008, a shareholder derivative action was led against
FCStone and certain directors of FCStone in the Circuit Court
of Platte County, Missouri, alleging breaches of duciary duties,
waste of corporate assets and unjust enrichment. An amended
complaint was subsequently led in May 2009 to add claims
based upon the losses sustained by FCStone arising out of a
customer’s energy trading account. On July 7, 2009, the same
plainti led a motion for leave to amend the existing case to
add a purported class action claim on behalf of the holders of
FCStone common stock.