PBF Energy 2012 Annual Report Download - page 156

PAULSBORO REFINING BUSINESS
NOTES TO FINANCIAL STATEMENTS—(Continued)
allegations of liability for gasoline containing MTBE manufactured at the Paulsboro Refinery. The Valero
subsidiary that previously owned the Paulsboro Refinery has been named in four of the cases along with Valero
and other Valero subsidiaries and has potential liability in the other six cases. In connection with the sale of the
Business, Valero retained the liability for these matters. The plaintiffs are generally water providers,
governmental authorities, and private water companies alleging that refiners and marketers of MTBE and
gasoline containing MTBE are liable for manufacturing or distributing a defective product. Valero has been
named in these lawsuits together with many other refining industry companies. Valero is being sued primarily as
a refiner and distributor of MTBE and gasoline containing MTBE. Valero does not own or operate gasoline
station facilities in most of the geographic locations in which damage is alleged to have occurred. The lawsuits
generally seek individual, unquantified compensatory and punitive damages, injunctive relief, and attorneys’
fees. All but one of the cases are pending in federal court and most are consolidated for pre-trial proceedings in
the U.S. District Court for the Southern District of New York (Multi-District Litigation Docket No. 1358, In re:
Methyl-Tertiary Butyl Ether Products Liability Litigation). Discovery is open in all cases. Valero believes that it
has strong defenses to all claims and is vigorously defending the lawsuits. Although Valero has recorded a loss
contingency liability with respect to the MTBE litigation portfolio, the Business had not recorded a liability for
this litigation.
Other Litigation
The Business was also a party to other claims and legal proceedings arising in the ordinary course of business.
Management believed that there was only a remote likelihood that future costs related to known contingent
liabilities related to these legal proceedings would have a material adverse impact on the results of operations or
financial position of the Business.
8 - EMPLOYEE BENEFIT PLANS
Employees who work for the Business were included in the various employee benefit plans of the Parent. These
plans included qualified, non-contributory defined benefit retirement plans, defined contribution plans, employee
and retiree medical, dental, and life insurance plans, incentive plans (i.e., stock options, restricted stock, and
bonuses), and other such benefits. For the incentive plans, the Business was charged with the bonus, stock option,
and restricted stock expense directly attributable to its employees. For the purposes of these financial statements,
the Business was considered to be participating in multi-employer benefit plans of the Parent.
The Business’ allocated share of the Parent’s employee benefit plan expenses were as follows (in thousands):
Period from
January 1
through
December 16,
2010
Defined benefit plans excluding incentive plans ......................................... $13,361
Incentive plans ................................................................... 6,305
Employee benefit plan expenses incurred by the Business were included in operating expenses with the related
payroll costs.
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