World Fuel Services 2004 Annual Report Download - page 23

Item 3. Legal Proceedings
In April 2001, Miami-Dade County, Florida (the “County”) filed suit (the “County Suit”) against 17 defendants to seek
reimbursement for the cost of remediating environmental contamination at Miami International Airport (the “Airport”). Page
Avjet Fuel Corporation, now known as PAFCO LLC (“PAFCO”), is a defendant. We acquired a 50% interest in PAFCO from
Signature Flight Support Corporation (“Signature”) in December 2000. Pursuant to the PAFCO acquisition agreement,
Signature agreed to indemnify us for all PAFCO liabilities arising prior to the closing date (“Closing”). Because the Airport
contamination occurred prior to Closing, we believe that the County Suit is covered by Signature’ s indemnification obligation.
We have notified Signature of the County Suit, as stipulated in the acquisition agreement. We expect Signature to defend this
claim on behalf of PAFCO and at Signature’ s expense.
Also in April 2001, the County sent a letter to approximately 250 potentially responsible parties (“PRP’ s”), including
World Fuel Services Corporation and one of our subsidiaries, advising them of their potential liability for the clean-up costs of
the contamination that is subject of the County Suit. The County has threatened to add the PRP’ s as defendants in the County
Suit, unless they agree to share in the cost of the environmental clean-up at the Airport. In May 2001, we advised the County
that: (1) neither we nor any of our subsidiaries were responsible for any environmental contamination at the Airport, and (2) to
the extent that we or any of our subsidiaries were so responsible, our liability was subject to indemnification by the County
pursuant to the indemnity provisions contained in our lease agreement with the County.
The claims asserted by the County relating to environmental contamination at the Airport remain pending; however, no
significant developments occurred during the year ended December 31, 2004. We intend to vigorously defend these claims,
and we believe our liability in these matters (if any) should be adequately covered by the indemnification obligations of
Signature as to PAFCO, and the County as to World Fuel Services Corporation and our other subsidiaries.
In November 2004, World Fuel was served with process in a lawsuit titled Action Manufacturing Co., Inc. et al. v. Simon
Wrecking Company, et al. This action, pending in U.S. Federal District Court for the Eastern District of Pennsylvania, relates
to the environmental clean up of the Malvern TCE Superfund site in Chester County, Pennsylvania. The plaintiffs are a group
of private corporations that entered into a consent decree with the Environmental Protection Agency in 1999, under the terms
of which the plaintiffs agreed to pay for remediation of the site. In the action, the Plaintiffs are seeking contribution from the
various Defendants toward the costs of remediating the site. Plaintiffs have alleged that World Fuel is a “successor” to
Resource Technology Services, Inc., a Pennsylvania corporation that arranged for disposal of wastes at the site. In 1988,
Resource Recovery Atlantic, Inc., a Delaware corporation that was then an indirect subsidiary of World Fuel, purchased
selected assets from Resource Technology Services, Inc. The plaintiffs claim that this transaction gives rise to our successor
liability pursuant to the Pennsylvania Hazardous Sites Cleanup Act. The plaintiffs have alleged that Resource Technology
Services Inc.’ s share of the clean-up costs is $1.0 million.
World Fuel’ s subsidiary, Resource Recovery Atlantic, Inc., acquired only selected assets of Resource Technology
Services, Inc., and did not assume any of its liabilities, except for four vehicle leases. We believe that neither World Fuel, nor
any of our subsidiaries, is a “successor” to Resource Technology Services, Inc. and that we are not responsible for any
liabilities of that company. We intend to vigorously defend all claims asserted against us arising from liabilities of Resource
Technology Services, Inc.
We may not prevail in the legal proceedings described above and we cannot estimate our ultimate exposure if we do not
prevail. A ruling against us in certain of the proceedings described above could have a material adverse effect on our financial
condition and results of operations.
In addition to the matters described above, we are also involved in litigation and administrative proceedings primarily
arising in the normal course of our business. In the opinion of management, except as set forth above, our liability, if any,
under any other pending litigation or administrative proceedings, even if determined adversely, would not materially affect our
financial condition or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of shareholders, through the solicitation of proxies or otherwise, during the quarter
ended December 31, 2004.
Page 11 of 72